2021 Dealership Resources: Auto Inventory Challenges

Aside from inventory shortages impacting a vast majority of brands, dealerships from coast to coast are strategizing on to overcome new and ongoing challenges alike.

Following challenges from COVID-19 and growing inventory concerns spurred by the microchip shortage in early 2021, dealers’ performance in Q2 varied greatly from brand to brand, and store to store.

Today’s buyers are more informed than ever and most are well aware of the ongoing inventory challenges dealerships are facing – as well as how the vehicle shortages are impacting car sales prices.

In the dealership world, the one topic on everyone’s mind is inventory shortages. From coast to coast, nearly every brand is experiencing new vehicle inventory shortages, challenging dealers to adapt.

According to a recent industry survey, 76% of in-market vehicle buyers are aware of the ongoing chip shortage, 83% of which are aware of its impact on the new vehicle market.

Looking specifically at pre-owned, the average retail selling price of pre-owned vehicles by new car dealerships has increased by 11% compared to 2020.

Forecasts from IHS Markit estimate 1.3 million fewer light vehicles were produced in the first quarter of 2021 due to chip shortages and other external influences.

For auto dealers, the ongoing chip shortages have resulted in historically low new vehicle inventories, as well as contributed to sky-high auction prices for pre-owned models.

Amid countless external factors driving ongoing chip shortages, dealers are forced to adapt to evolving inventory challenges to secure both their immediate and future success.

According to IHS Markit, an estimated 1.3 million fewer light vehicles were produced in the first quarter of 2021 because of semiconductor shortages, historically low new vehicle inventories.

With countless evolving factors impacting OEM production and deliveries, now is the time for dealers to focus on the elements they can control.