Supply chain issues from B.C. port strike threaten to once again make buying a car a months-long process
Jason Peters | CBC | Posted: July 10, 2023 9:20 PM | Last Updated: July 10, 2023
Canada imports its cars heavily from Japan and South Korea. Automakers in Canada could also be affected
As the automotive industry in Canada continues to steer its way out of a pandemic pothole, it's facing additional challenges because of an ongoing strike by port workers in British Columbia, according to industry insiders.
Factory shutdowns due to COVID-19 made for widespread shortages of parts, filtering down to a historic lack of finished vehicles for sale on dealer lots.
Now, Huw Williams, director of public affairs for the Canadian Automobile Dealers Association, says the strike — now in its second week — could keep supply and demand out of balance much longer than originally anticipated.
For consumers, a shortage in vehicles and parts means finding a new car to purchase could remain difficult for the foreseeable future.
"We've gone through prolonged shortages [due to the pandemic], so we had been predicting that supply and demand would meet towards the end of this year ... This port strike will likely destroy that prediction," Williams said Monday.
WATCH | What you need to know about the B.C. port strike
In an ordinary year, Williams says Canadian auto dealers might sell 1.8 million vehicles. But, he says three years of supply chain shortages during the COVID-19 pandemic have dropped that number to about 1.4 million.
Data from DesRosiers Automotive Consultants shows that in the first quarter of 2023, on average, Canadian new car dealerships only had about 42 per cent of the inventory that they would have had before the pandemic.
That's better than the 19 per cent they were at the same time a year earlier, but still less than half of what could be considered normal. And the recovery will be slowed if new parts can't make it to Canadian markets.
Strike could also impact domestic manufacturing
About 7,400 members of the International Longshore and Warehouse Union Canada have been on strike since July 1, idling all cargo handling at the Port of Vancouver, Canada's busiest harbour.
The Vancouver Fraser Port Authority says the port is about the same size as the next five largest Canadian ports combined and handles around one-third of Canada's trade in goods outside North America.
Canada imports its cars heavily from Japan and South Korea, the bulk of which comes to Canada through B.C. ports.
It's not just the importing of new vehicles that stands to be affected by the strike. Kim Thiara, head of the Canadian Association of Moldmakers, says automakers in Canada could also be affected by the work stoppage.
Thiara says the industry is "somewhat reliant" on the free flow of trade so that it can make parts for new vehicles.
"No single plastic part can be made without a mould," Thiara told CBC. "Canadian mould-makers make the things that make things so it is important for those materials to keep flowing through to the production facilities so that they can then turn that piece of steel into a mould that's going to produce a part that's going in the car that you've got on order. And that car could be delayed by this strike if it is prolonged indefinitely."
Thiara says one lesson companies learned during the COVID-19 pandemic was to have contingency plans in place, but she hopes the strike will not drag on.
"I think that … they will come to some sort of terms sooner than later, and yeah, let's hope for the best."
'Go talk to your dealer early'
For consumers looking to purchase new vehicles, Williams recommends speaking with dealers early in the process, much like during the pandemic.
"Go talk to your dealer early so that you know what's coming in and what's available," he said. "The earlier you start that conversation, the better off you'll be in terms of the sales process.