Archive for April, 2021

Supply Chain Nightmares – Continued

Wednesday, April 14th, 2021

I’m sure you’re as tired of reading about supply chain issues causing inventory shortages as I am about writing about it, but if you’re in the automobile industry, there is NOTHING else more important to talk about. I had hoped the new year would show signs of improvement, but unfortunately the opposite is happening. COVID shutdowns are declining (at least directly), but other hurdles have risen that more than offset any improvements.

Microchip supplies are the major limitation now. The manufactures and auto suppliers order chips several quarters in advance, in huge batches. When COVID hit, everyone cancelled chip orders. Chip manufacturers shifted to computers, webcams, gaming consoles, and telecommunications equipment where demand spiked with the pandemic. When auto demand rebounded quicker than anyone expected, recovering chip supplies for cars is like turning an ocean liner.

Then, SNOWPOCALYPSE shut down petrochemical processing plants, who’s output is used for plastics, resins, and foams in vehicles. Additionally, the Feb. 13th earthquake in Japan took down several auto suppliers. Then last week there was the Suez Canal blockage and Japan suffered a plant fire that will make the microchip supply even scarcer.

Supply chain issues have impacted every major manufacturer, but certain models have been just decimated. Of our most popular models, these have been hit the hardest:

GMC Yukon & Yukon XL
Chevy Suburban & Tahoe (Tahoe inventory is down over 75%)
Cadillac Escalade
Jeep Wrangler
Toyota 4Runner
All Chevy Trucks
All Heavy Duty Trucks
Land Rover Range Rover
Mercedes All Models
BMW X5 & X7

This has certainly led to a seller’s market. Rebates are down and prices are up. Does that mean it’s a bad time to buy a new car? Not necessarily. Late model used vehicles have increased in value faster than new car prices. Trade-ins have NEVER been worth more, particularly if you have 60k miles or less. Just be patient while we find you a new vehicle.

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