Auto dealerships on P.E.I. see big drop in sales in 2022

Prince Edward Island automobile dealerships battled through a difficult year in 2022, with more than 1,000 fewer vehicles sold than in 2021.

The 6,735 units sold represented the lowest number since 2012, but Adam Toner, vice president of the P.E.I. Automobile Dealers Association, said it was not due to a lack of desire for new vehicles.

"It's strictly supply, lack of it across all brands, all models, all segments," said Toner.

Sales were down all across the country due to a shortage of crucial parts for the completion of vehicles, in particular microchips. Suppliers have been struggling to get back up to speed after a slowdown in demand in the first year of the COVID-19 pandemic.

That shortage started in 2021 and is not yet completely resolved.

Fewer new car sales means fewer trade-ins and people holding onto their existing vehicles longer, and that has caused a shortage in the used market as well, said Toner.

There's "less selection, less variety, so [buyers] might have had to maybe settle for something they wouldn't normally buy as a used vehicle, whether that's higher kilometres or maybe options or colour that they weren't necessarily thrilled about," he said.

By unit, vehicle sales on P.E.I. peaked in 2016. Sales have been up and down since, but moving downward. The pandemic only accelerated that trend, even including a sales rebound in 2021.

Looking at the dollar value of sales shows a prettier picture for dealers.

The value of sales since 2016, while up and down, has overall been flat. The value of sales in 2022 was slightly higher than in 2016, thanks in part to the continually growing taste of Islanders for trucks.

In 2016, about two out of three vehicles sold on P.E.I. were trucks. By 2022 that had grown to four out of five.

Toner expects the supply to continue to improve throughout 2023, but he does not think it will happen quickly.