Supply challenges still affecting new vehicle sales
The average price of a new vehicle sold in Alberta is $11,000 higher than before the pandemic
By Rob Roach, ATB Economics 19 April 2023 1 min read
Before the pandemic, we tracked new car and truck sales data to help get a sense of how the overall economy was performing. If sales were up, it was a sign that consumers and businesses felt confident enough to make a major purchase like a new vehicle and that they had the financing to do so.
But with the supply chain challenges that developed during the pandemic—challenges that have still not been fully resolved—it is difficult to separate the impact of vehicle shortages from other economic factors.
What we can say with certainty is that the supply chain issues combined with other inflationary pressures have pushed up the average cost of vehicles.
The average price* of a new vehicle sold in Alberta in February 2023 was $11,000 higher (+22.4%) than in February 2020 just before the pandemic was declared.
It’s the same story nationally, with the average price up by 24.7%.
The number of units sold has gone in the other direction.
In Alberta, the number of new vehicles sold was 13.4% lower in February 2023 than in February 2020 while national sales were down by almost the same amount (-13.9%).
On an annual basis, the number of vehicles sold last year was 8.7% lower than in 2021 in Alberta and 10.4% lower nationally.
Vehicle inventory is expected to improve in 2023 as the global shortage of semiconductor chips continues to ease, but it will still take more time before supply and demand are back in balance in the auto sector.
*The average price equals the total sales value divided by total units sold. The change in the average price may therefore be related to the purchase of different models as well as any changes in the price of the same models over time.
Answer to the previous trivia question: During the California Gold Rush of 1849 a dozen eggs in San Francisco might have cost you around $90 in today’s money.
Today’s trivia question: How many new motor vehicles were sold in Alberta last year?