The 10 top developments in a year of startling changes
Here is a list of the 10 most important developments in the retail automobile industry, from a dealer's perspective.
Last December, the mood of the car-buying public and new-car dealerships was grim. The Canadian economy was in a tailspin and nobody knew when we’d hit bottom.
A year later, the auto industry is still recovering from a 20 per cent decline in new-vehicle sales, year over year.
To say that it’s been a year of change and evolution for the auto industry would be a serious understatement.
Here is a list of the 10 most important developments in the retail automobile industry, from a dealer’s perspective.
1. Consumers who wanted to buy vehicles this year likely discovered that it was more difficult to get auto loans approved. In years past, consumer credit was relatively easy to obtain, but in 2009, banks and lending institutions were far more scrupulous about extending credit.
This lack of available credit became a critical issue among car dealerships across Canada, as well. I was part of a delegation that travelled to Ottawa to try to persuade the federal government to free up some much-needed working capital for dealers.
2. Many new car dealers found it challenging to buy vehicles from the manufacturers, because they didn’t have access to capital. When dealers can’t borrow money to purchase vehicles, they don’t have product to sell and their businesses ultimately suffer.
3. In January, the federal government announced the Retire Your Ride program, aimed at getting older, high-emission vehicles off the road. Motorists are offered $300 (or a bike, or discounts on transit passes) for their old clunkers.
Consumer advocates, industry analysts and new car dealers quickly dismissed the Retire Your Ride program as meaningless. Some manufacturers sweetened this government incentive with their own Cash for Clunkers programs.
4. In February, the Canadian International Auto Show drew more than 250,000 spectators in the midst of a sluggish market. This was a great vote of confidence for dealers and manufacturers, as car lovers demonstrated their passion for automobiles.
5. In May, General Motors of Canada decided to close 240 dealerships across Canada, in a restructuring effort aimed at making the automaker more competitive. This adjustment was extremely stressful for GM dealers and staff affected by these changes (total employment at dealerships fell by three per cent this year, according to DesRosiers Automotive Consultants).
6. Alternative fuel technologies continued to make headlines. Although these technologies are still years away from mass acceptance (only two per cent of all new vehicles sold in Canada are hybrid), automakers continued to devote significant resources to research and development of greener vehicles.
7. In July, Ontario Premier Dalton McGuinty announced a government rebate program for buyers of plug-in and electric vehicles. The rebate will be worth between $4,000 and $10,000 for motorists, and it kicks in next July. Most industry watchers have labelled the program a dud.
8. Throughout the year, registered new-car dealers have been preparing for the implementation of the new Motor Vehicle Dealer Act 2002 regulations, which come into law on Jan. 1.
These changes are meant to ensure that dealerships operate with greater compliance and accountability, and that consumers who buy vehicles from registered dealers are better protected.
9. In September, auto manufacturers agreed to provide independent auto repair businesses with access to vehicle diagnostic and repair technology, training and documentation. This agreement, known as the Right to Repair issue, effectively forestalls Bill C-273.
10. Last week, Toyota Canada announced plans to add a second shift â€“ and 800 jobs â€“ to its assembly plant in Woodstock. This is a great news story to end the year, and I think it bodes well for an overall improvement of the auto industry in 2010.
Happy holidays and best wishes to all in 2010!
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