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Highlights
- According to DesRosiers Automotive Consultants' survey, the semiconductor shortage continued to stress the new car market by sending auto buyers to used cars, which boosted Canada's used car sales by five per cent in 2021.
- The report expects 2022 average sales to rise to 256 per dealer, with independent dealers projecting gains and franchised dealers predicting a minor slump.
- A Toronto-based auto firm mentioned here increased its top line by 108 per cent YoY to US$ 19.8 million in Q3 FY2021.
Blockades led by the anti-vaccination mandate protesters at Canada’s Ambassador Bridge has visibly rocked the automotive industry, with plants of major players like Toyota and Ford facing various degrees operational hiccups.
As diverting traffic, including trucks seeking to cross the Canada-US border, pile up at the Blue Water Bridge, wait time continues to rise and impact the auto industry’s supply chain crisis further.
This is the latest disruption to hit the supply chain of carmakers in Canada, which have already faced much stress due to the semiconductor shortage.
But while new car manufacturers take a hit, a rising number of car buyers seem to be turning to the used car market.
On that note, let us explore two Canadian auto companies that have business divisions in the used vehicles market.
AutoCanada Inc (TSX: ACQ)
AutoCanada operates the used digital retail division and collision centres underpinned by two used vehicle dealerships.
The Edmonton, Alberta-headquartered automobile company expects its same store used-to-new vehicles sold ratio reach around 1.3 in Q4 FY2021, up from 0.91 a year ago, according to its preliminary unaudited highlights.
The company also expects its revenue to be somewhere between C$ 1.13 billion and C$ 1.17 billion in this quarter, which would indicate an approximate jump of 30 per cent year-over-year (YoY).
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AutoCanada stock closed at C$ 35.3 apiece on Thursday, February 10, having soared by almost 18 per cent in the last one year.
Also read: Algonquin (AQN) & Magna (MG): 2 TSX large-cap stocks on sale right now
E Automotive Inc (TSX:EINC)
E Automotive leverages its online car auction platform as a wholesale marketplace where dealers can buy or sell vehicles. The tech-powered auto firm also offers digital automotive dealership solutions.
The Toronto-based auto firm increased its top line by 108 per cent YoY to US$ 19.8 million in Q3 FY2021.
E Automotive stock closed at C$ 11.2 apiece on Thursday.
Bottomline
While the global semiconductor shortage continues to impact the production of new vehicles, the blockades created by the ongoing trucker protests in Canada adds on the auto industry’s supply crunch.
As these factor can impact the prices of new vehicles, it can further boost auto buyers' interest in used vehicles, which can then bolster their sales and stock performances in the future.
Also read: 2 Canadian semiconductor stocks to explore in 2022
