Photo: Ford
According to AutoNation, the largest automotive retailer in the U.S., half of the new cars arriving at dealerships are already sold before they left the factory. The situation is not expected to change any time soon, with tight inventories probably expected to last through the first half of the year.
Tight inventories driven by computer chips shortages and production glitches made buying a new vehicle an extremely complicated endeavor. Supply is in such a huge disconnection with the demand that people have to wait for months and even years before they get their cars. Of course, the dealers make the best out of this situation, marking up the most desirable models and juggling cars to the highest bidders.
The supply is so tight now that half of all new Chevrolets, Fords, Toyotas, and other major brands arriving at dealer lots in the next 90 days are already sold out, says AutoNation, the largest automotive retailer in the U.S. The situation is even more complicated when it comes to luxury cars, with nearly three out of four vehicles arriving at dealers in the next three months being “presold”. This means a customer already paid a deposit for the car and will buy it as soon as it becomes available.
“This tight-inventory situation is going to be around certainly through the first half,” said AutoNation’s chief executive, Mike Manley, for The New York Times. “I’m hoping we do see some improvement in the second half.”
The shortages started in the months after the pandemic wreaked havoc in the automotive industry, but were exacerbated by the chip crisis, as well as other supply chains problems that followed. Even today, the major carmakers in the U.S. face extended periods of idling production at plants because they do not have enough chips to build cars.
The car market is in a strange situation right now, with most vehicles sold even before they leave the factory. This is in stark contrast with how the business was done before the pandemic, when the car dealers stocked hundreds and even thousands of vehicles and waited for months to sell them. This is beneficial to dealers, as it allowed them to sell cars at the sticker price and even way above that.
The supply is so tight now that half of all new Chevrolets, Fords, Toyotas, and other major brands arriving at dealer lots in the next 90 days are already sold out, says AutoNation, the largest automotive retailer in the U.S. The situation is even more complicated when it comes to luxury cars, with nearly three out of four vehicles arriving at dealers in the next three months being “presold”. This means a customer already paid a deposit for the car and will buy it as soon as it becomes available.
“This tight-inventory situation is going to be around certainly through the first half,” said AutoNation’s chief executive, Mike Manley, for The New York Times. “I’m hoping we do see some improvement in the second half.”
The shortages started in the months after the pandemic wreaked havoc in the automotive industry, but were exacerbated by the chip crisis, as well as other supply chains problems that followed. Even today, the major carmakers in the U.S. face extended periods of idling production at plants because they do not have enough chips to build cars.
The car market is in a strange situation right now, with most vehicles sold even before they leave the factory. This is in stark contrast with how the business was done before the pandemic, when the car dealers stocked hundreds and even thousands of vehicles and waited for months to sell them. This is beneficial to dealers, as it allowed them to sell cars at the sticker price and even way above that.
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