NEW BRITAIN, Conn. — There are three words that we have become all too familiar with during the pandemic: supply chain crisis. One of the business sectors most impacted is auto industry. And, the brakes could be on for a while longer longer.
Pre-pandemic, a massive lot, at Schaller Honda in New Britain, was typically full of up to 300 new vehicles. Now, it has none.
"It's not easy telling a customer 'geez I'm sorry I can't get you your car for three months," said Art Schaller, Jr., owner of the Schaller Auto Group, which includes Honda, Subaru and Acura dealerships.
But, in the current climate, three months would be lightning quick for some consumers.
"Last year, on February 13, I ordered a brand-new Silverado," said John Ransom of Windsor.
His Chevrolet truck has still not been delivered, even though it was finally built three months ago. He sent FOX61 a link to pictures of his Red 2022 Chevrolet Silverado Limited, which is still sitting in Indiana. "I don't know if I've always been patient but with what's been going on I try to be patient," he said with a smile.
Read more about Ransom's car buying journey here: Car-buying in 2021 could come with several headaches due to supply shortage. This is what you need to know
UPDATE:
John Ransom's truck arrived at the dealer in shortly after this story aired.
What can car buyers do? Here's advice from AAA :
- Be flexible – Talk to more than one dealer
- Do your homework – Know what the manufacturer’s suggested retail price of the car is, and what the dealer paid for the car.
- Brand loyalty may be a thing of the past right now – If you’ve always driven a Ford, check out Chevrolet. You might find something that fits your needs that you can get sooner.
- Be sure to perform maintenance on your current car to maximize the value of your trade-in
- This situation could last into 2022
- When you reach a deal on a car, have a sales contract that holds the dealer to the price you’ve agreed on in writing.
The automobile industry's biggest challenge: a shortage of microchips, largely produced in China.
"I heard a speaker recently tell us that the average car has 1400 chips in it," said Schaller.
That seems unfathomable until you think of all of our vehicle's features. "Clock, radio, SiriusXM, Apple car play, android auto, navigation systems, all these different things, blind spot monitoring," said Schaller.
With a limited number of new vehicles available it impacts the used car market. "Trade-in values are soaring. I mean they're up almost 50% from one year ago, which you don’t see these types of numbers quite often," said Jessica Caldwell, Edmunds.com Executive Director of Insights .
But, if new is a priority, dealers suggest reviewing their websites for vehicles already on their way. "We can print out the window sticker to the actual car or SUV that they are looking for so it gives them a better feeling knowing what they’re gonna buy when it comes," said Frank Perrelli, Floor Manager for the Harte Auto Group, which has nine Connecticut Dealerships
Many dealers are looking at this crisis as an opportunity to diversify temporarily. "Like build to order where some more consumers would be ordering their vehicles [through the manufacturer] rather than just going to the dealership," said Caldwell.
But, is there an end to this chip shortage in sight? "We are starting to see it now," said Perrelli. "When will it show? Maybe second quarter of this year."
But most suggest normalcy won't return until perhaps early next year. "What happened is when shutdowns first started, factories were ordered closed and our showrooms were closed," Schaller explained. "So, I think the auto manufacturers said 'hey wait stop making us chips.'"
And, that's about the same time industries, like computers and other electronics, serving the work at home crowd, took off and started buying up the available microchips.
Last summer, the United States Senate passed the US Innovation and Competition Act and part of that is $52 billion, which set aside for semiconductor research and development and manufacturing here in the United States so that more inventory like this is available on showroom floors.
In an analysis from Edmunds.com experts, the data is showing the vast majority, 82.2%, of the new car market is selling over Manufacturer's Suggested Retail Price. They looked at their days-to-turn data to determine what the hottest vehicles in the industry are, meaning the ones consumers shouldn't expect to last on dealers' lots very long.
Edmunds.com also compiled lists of the Top 10 hottest new cars and top 10 available new and used cars.
Top 10 Available Used Cars
- Large Truck Ford F-150
- Large Truck Chevrolet Silverado 1500
- Large Truck Ram 1500
- Compact Car Honda Civic
- Compact SUV Honda CR-V
- Compact SUV Toyota RAV4
- Midsize Car Honda Accord
- Midsize Car Toyota Camry
- Compact SUV Chevrolet Equinox
- Midsize SUV Jeep Wrangler
Top 10 Available New Cars
- Segment Make Model
- Large Truck Ford F-150
- Large Truck Ram 1500
- Large Truck Chevy Silverado 1500
- Midsize Car Toyota Camry
- Midsize SUV Ford Explorer
- Compact SUV Toyota RAV4
- Midsize Truck Toyota Tacoma
- Midsize SUV Jeep Grand Cherokee L
- Compact Car Honda Civic
- Midsize SUV Jeep Wrangler
Top 10 Hot New Cars
- Compact SUV Ford Escape Plug-In Hybrid
- Compact SUV Subaru Crosstrek
- Minivan Kia Carnival
- Sports Car Toyota GR86
- Compact Car Toyota Corolla
- Compact SUV Honda CR-V Hybrid
- Compact SUV Subaru Forester
- Midsize SUV Toyota Highlander Hybrid
- Luxury Midsize SUV BMW X6
- Midsize SUV Kia Telluride
Tony Terzi is a reporter at FOX61 News. He can be reached at tterzi@fox61.com. Follow him on Facebook, Twitter and Instagram.
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