AutoCanada Inc. isn’t getting out of the new-vehicle business, but the dealership group that owns 83 franchised stores in Canada and the United States is leaning on the used side of its operation to grow sales and provide a hedge against ongoing turbulence in the new-car market.
The company is “beholden” to the automakers it represents for new-vehicle inventory, said AutoCanada Executive Chairman Paul Antony, but the “unconstrained nature” of the used-vehicle segment gives the company “wide-open runway” to grow.
“Used is going to be off the charts for the next three to four years,” he said, pointing to restricted vehicle production due to the pandemic and microchip shortage. AutoCanada’s profitability fell in the first quarter of 2023, a result of the same interest rate pressures experienced by its customers, as well as poor performance at its U.S. dealerships. Its new-vehicle sales volume also declined, dropping to 8,771 units, 3.1 per cent lower than the same three-month period a year earlier.
In 2018, Antony said the company took about 48 days to prepare used inventory for sale. In the latest quarter, that figure was between 27 and 28 days, helping trim floor plan financing costs. But cutting reconditioning timelines remains a work-in-progress, with the industry average running between 10 and 14 days, he added.
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