WHEN CAN WE EXPECT MORE INVENTORY IN THE AUTO INDUSTRY?
Since the COVID-19 epidemic emerged in the United States in the spring of 2020, the auto industry has been a rough ride. Unfortunately, it’s not yet time to unbuckle your seatbelt. The “Great American Car Shortage” is still going on as we look forward to 2022. Many automakers were forced to close their doors in 2020, and dealerships swiftly followed suit or changed their focus to live video-conferencing with clients and other alternatives. Consumers bought cars at a faster rate than automakers could create them when dealerships reopened. Though the worldwide outlook for the auto business may appear grim, there are some benefits for dealerships. In fact, some dealerships are benefitting from the scarcity of chips.
WHAT IS THE CAUSE OF THE AUTO INDUSTRY’S LOW INVENTORY?
Let’s go under the hood to uncover what’s causing the auto industry’s low inventory. High demand, COVID-related supply issues, and the present worldwide microprocessor shortage are all contributing to the limited vehicle inventory. Though the microprocessor shortage is the most pressing issue facing the car industry right now, there is more than one issue to consider as we move ahead to 2022.
BOTH NEW AND USED VEHICLES ARE IN HIGH DEMAND.
The outbreak sparked a mad rush for automobiles across the country. In the early days of quarantine, pickup vehicles were in particularly high demand. Many purchasers have stimulus money to spend and want to put it towards buying their own mode of transportation. For road trips and solo commutes to work, a car has never looked better.
in a dealership, a close-up of a car bumper light
SHORTAGE OF CHIPS IN THE WORLD
The chip shortfall occurred before the auto sector could recover from the high demand and supply concerns. Every major automaker has been impacted by the chip shortage. This places additional limits on current inventory and raises pricing. Chips are used in more than only the vehicle sector; they’re also used in various gadgets that grew in popularity throughout the pandemic. According to some experts, the chip scarcity could endure until the year 2023.
OTHER SUPPLY CONTROVERSIES
Though the chip shortage receives the most attention, it isn’t the only component that automakers are experiencing shortages of. According to at least one poll, the automobile industry was the severely afflicted by supply chain concerns during the COVID-19 pandemic. Parts and supplies are in short supply for a variety of causes, including COVID-related supplier facility closures, logistical challenges such as ship, shipping container, and truck driver shortages, and some suppliers’ inability to fill jobs.
auto assembly line with robots
INVENTORY OF NEW CARS
Due to the chip scarcity, strong demand, and other supply chain challenges, new car inventories at dealerships across the country has been restricted. New car inventory in the United States is beginning to stabilize after falling to historic lows. Overall, though, inventories remains lower than typical, and it may stay so for some time.
Due to the chip shortage, GM paused most of its full-size pickup truck production in the United States and Mexico for nearly a week, and Ford slowed its North American vehicle production from July to August.
On the plus side for dealerships, new vehicle listing prices continue to rise. The average cost of a new car, according to one estimate, is $41,378.
This year, there’s no need to hold big Christmas sales to clear off your inventory! Due to rising demand, many dealers are able to sell new vehicles to customers before they appear on the lot.
INVENTORY OF USED CARS
During the epidemic, demand for used automobiles soared to all-time highs, as did the price of used cars. As consumers sought to them for the vehicles they desired, many used-car dealers have had record years and earnings. Because new automobile prices are so high, many people are opting for secondhand cars, which are becoming more expensive and difficult to find.
However, when new automobile inventories improve near the end of the year and into the new year, pre-owned car stocks will also rise.
According to Edmunds, the average transaction price for a used automobile in the second quarter of 2021 was $25,410, up from $22,977 in the first quarter and up 21% year-over-year. The used-car market, on the other hand, appears to be leveling out. Owners will be enticed to trade in their present car to dealerships in exchange for the latest model, especially in early 2022, as the value of trade-in prospects rises.
It’s a wonderful time to reach out to previous customers who may not be utilizing their present vehicle as often as they used to due to the epidemic or who might be interested in upgrading.
WHAT DOES LOW INVENTORY MEAN FOR AUTOMOTIVE STORES?
The low auto inventory is actually helping some dealerships. Vehicles are driven off the showroom floor as soon as they are driven onto it. Many clients are uninterested in waiting for a new model or extra features.
In order to fill your dealership’s lots, automakers are getting more inventive. On some models, they’re changing the availability options. To keep manufacturing lines moving and fulfill demand, Nissan apparently removed navigation systems from tens of thousands of vehicles.
However, this also means that competition for dealerships across the country is fiercer than ever. You need SimpSocial if you want to compete with other local dealerships for customers. Our technology works.
a woman stands next to a brand new automobile
WHEN WILL THE AUTOMOTIVE INDUSTRY SEE MORE INVENTORY?
Unfortunately, it’s probable that inventory levels in the auto industry will never recover to pre-COVID levels. The auto sector will have to conform to the new normal for the time being. Your lots, on the other hand, should be filling up with more vehicles as time goes on, especially when the semiconductor situation improves.
In the interim, SimpSocial can aid you in locating all of these rampant vehicle purchasers in order to sell the inventory you do have on your lot.
SIMPSOCIAL CAR DEALERSHIP LEAD GENERATION
SimpSocial is the future of car dealership lead generation, and it’s already here. SimpSocial’s system is effective. We not only produce your online auto leads, but we also assist you in scheduling appointments. Then it’s only a matter of selling the autos.
In the dealership, a young couple selects vehicles.
How are we going to do it? We offer visitors around your dealership the best inventory and the most recent specials. We take them straight from Facebook and Instagram to your dealership and into their new car. We are the dealership marketing proof that selling vehicles on Facebook doesn’t require lying. So please don’t do that! Instead, put your faith in SimpSocial’s automobile marketing professionals. We’ll assist you in selling cars while maintaining the trust of your market and clients.
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