TADA

Trillium Automobile Dealers Association

Serving the interest of Ontario New Car
and Truck Dealerships for over 100 years

Musings on the industry

Created on Friday, 25 March 2011

My term as president of the Toronto Automobile Dealers Association (TADA) ends in May, limiting the opportunities for me to reflect on some recent topics.

I appreciate all of the feedback that I've received, whether it supports my views or otherwise. It proves that the Wheels section has a wide following, and this column has its share of readers.

Surprisingly, the column that has generated the most reader response focused on the requirement for front licence plates in Ontario.

More than 90 per cent of the many letters and emails I received supported my belief that Ontario should eliminate the need for a front plate on passenger vehicles.

A few weeks ago, I talked about curbing the use of devices that distract drivers and the deadly consequences of operating handheld devices while driving. Many readers thanked me for discussing this issue, including a letter of support from the Insurance Bureau of Canada.

Responses to columns about regulating the towing industry, bicycle riders, and non-registrants of OMVIC have been less complimentary.

I've been thinking, too, of the many journalists and manufacturers who were prepared to write off auto shows a year ago. Attendance was down, and manufacturers were re-thinking their commitment to this form of marketing.

What a difference a year makes! Auto shows are back with a vengeance. Attendance at the Los Angeles and Detroit auto shows was up substantially over 2010.

At Toronto's Canadian International AutoShow last month, the mood was no less enthusiastic. Total attendance was 304,000, a 19 per cent increase over 2010 and the third highest on record. This surely indicates growing consumer confidence and interest in our industry.

Indeed, the success of the auto show left the TADA and its members feeling fairly bullish about the remainder of 2011.

However, this optimism must be tempered with recent news from Japan.

Although it's too early to know how the disaster will affect our industry, long-term, one fact has become clear: automakers that build vehicles in Japan (or source parts from that country for production all over the world) will likely see temporary disruptions.

Practically all global auto manufacturers source some of their components from Japan. One hundred per cent of the necessary parts must be available before a vehicle can be completed and shipped. This will affect inventory levels at new car dealers.

Earlier this week, Automotive News reported that if factories continue to slow or shut down across Japan, "U.S. retailers should prepare for higher transaction prices on new vehicles in the next 60 days."

That prediction could affect Canadian auto retailers as well. As certain vehicle lines become scarce, incentives on certain brands will fall, which could have a ripple effect throughout the market.

Like other commodities that are based on supply and demand, together with the reduction or elimination of incentives, new vehicle prices are expected to rise, at least until production normalizes. This will likely affect all brands.

So, during the uncertainty in the automotive market, my message to car shoppers is this: If you are serious about purchasing or leasing a new vehicle, terrific incentives and product selection are still available.

But, for how long, it's anyone's guess!"


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