Global car shortage hinders car rentals in the North
Have you encountered any problems purchasing a vehicle, or leasing one for that matter? You’re not alone.
There is a global car shortage, and it’s impacting car rental companies and car dealerships.
“We as the rental industry… sort of experience the same shortages that you can see around all dealerships if you are in any type of downtown,” said Ben Mercier, Regional Manager for the Pacific Region of Driving Force, a vehicle leasing and rental company. It serves both the Yukon and the Beaufort Delta region in the Northwest Territories
This shortage is in part due to the fact that automakers, he said, are struggling to produce enough to meet current demand.
But the cause of the shortage is not only due to the fact that the vehicles are not manufactured, it is due to a shortage of computer chips. These chips are a key part of modern vehicles because the technology in these vehicles is operated by computers.
Tina Woodland, managing director and partner of Whitehorse Motors, said there was a shortage of microchips by the time COVID-19 hit, and the pandemic “was kind of the last straw.”
“I mean, these chips are used in everything,” she said.
Woodland said that because microchips are used in various technologies, such as phones and computers, and because more and more people have started working from home, the demand has grown beyond what the offer could match.
She also said that there have been problems among some of the factories that produce the crisps.
Woodland said that while the situation has improved over the past few months, microchip production continues to be slow while demand for cars remains high.
“I know Ford has produced a lot of vehicles, so the vehicles are built but they are waiting for the chips to be inserted,” Woodland said. “I don’t really see the end of the vehicle shortage until probably the end of next year.”
She said they have had to stop taking some deposits from customers because they can’t confirm when the cars will be ready, and her dealership has about 20 people on hold.
While trying to book a rental car in Inuvik, some residents told CBC News they were told it could be weeks before a car becomes available.
Mercier said rents were higher than expected.
“Maybe with Inuvik… maybe people weren’t able to buy the vehicles they would normally have bought, [so] it actually put more demand on rental car companies. “
“The request has just gone through the ground”
At the start of the pandemic, rental companies saw their business drop immediately when people started working from home, not going on vacation.
Mercier said demand had fallen more than 90 percent nationwide and 75 to 80 percent in the Yukon and Northwest Territories for his business.
“Car rental companies like ours pulled out of vehicles en masse because demand had just gone through the ground,” Mercier said.
But demand has now exploded.
Mercier said since the Yukon opened up to vaccinated visitors, his business has seen many more rentals. In the NWT, which is still closed to tourists, the majority of demand comes from residents and businesses.
“We not only have to fill our normal orders, but, you know, catch up with that kind of low point after COVID-19 started, which has been a big challenge,” Mercier said.
Inuvik still has a normal fleet of around 25 vehicles, Mercier said, but Whitehorse has half of its usual workforce with around 200 vehicles available.
While he is hoping they will get more supply over the next six months, Mercier said “they are keeping vehicles on our rental fleet longer than we normally would” in order to have more supply. supply for customers.