Global car shortage puts brakes on northern car rentals

Have you been experiencing troubles buying a vehicle, or renting 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 a rental industry … are kind of experiencing the same shortages that you can see around all the dealerships if you're in any sort of city centre," said Ben Mercier, the area manager for the Pacific region of Driving Force, a vehicle leasing and rental company. It serves both the Yukon and Beaufort Delta region in the N.W.T.

That shortage is partly because auto manufacturers, he said, are having a challenge producing enough to meet the current demand.

But the root of the shortage is not just because vehicles aren't being made, it's due to a shortage in computer chips. Those chips are a key component in modern vehicles because the technology in those vehicles is operated by computers.

Tina Woodland, general manager and partner at Whitehorse Motors, said there was a microchip shortage around 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 the microchips are used in various technologies, such as phones and computers, and because more people began to work from home, demand increased beyond what supply could match.

She also said there have been issues among some of the plants that produce the chips.

Woodland said that while the situation has improved from a few months ago, microchip production continues to be slow while demand for cars remains high.

"I know that Ford produced a lot of vehicles, so the vehicles are built but they are waiting for the chips to be inserted," said Woodland. "I don't see the vehicle shortage really ending until probably the end of next year."

She said that they have had to stop taking some customer deposits because they aren't able to confirm when the cars will be ready, and her dealership has about 20 people waiting.

When trying to book a rental car in Inuvik, some residents told CBC news they have been told it could be weeks for a car to become available.

Mercier said rentals have been higher than anticipated.

"Possibly with Inuvik … people maybe haven't been able to buy the vehicles that they normally would've purchased, [so] it's actually put more demand on rental car companies."

'Demand just went through the floor'

At the beginning of the pandemic, rental companies saw business immediately drop when people began working from home and not vacationing.

Mercier said demand dropped by more than 90 per cent across the country, and by 75 to 80 per cent in the Yukon and N.W.T. for his company.

"Rental car companies like ours were massively getting out of vehicles because demand just went through the floor," said Mercier.

But demand has now skyrocketed.

Mercier said that since Yukon opened up to vaccinated visitors, his company has seen a lot more rentals. In the N.W.T., which is still closed to tourists, most of the demand is coming from residents and businesses.

"We're not only having to fill our normal orders, but, you know, to catch up to that kind of low point after the start of COVID-19, which been a big challenge," said Mercier.

Inuvik still has a normal fleet of about 25 vehicles, Mercier said, but Whitehorse has half of their usual numbers with about 200 vehicles available.

Although he's hopeful they'll get more supply in the next six months, Mercier said "they are keeping vehicles on our rental fleet longer than we normally would" in order to have supply for customers.