today at 12:44 pm
What’s going on in the automotive industry today? Most of us have heard about some kind of ‘chip shortage,’ whether it be related to computers or to the chips necessary to run all the updated gadgets in today’s automobiles. Some are predicting that it will be into 2003 before this issue is solved and more cars can be put back into circulation. So many questions remain, one being what about all the vehicles that have been sitting-somewhere-not on dealer lots, waiting for that chip, or two. Will they need new batteries, tires, or any other necessity that will enable them to function before they can be sold to the public?
We’re told if you’ve got a desirable, or well-functioning used vehicle to sell, now is the time. Bringing top dollar, many folks are opting for used cars over new ones: the most obvious reason being the lack of inventory of new vehicles, and the rising costs.
Along with this new experience in car-land, the dealers are trying to re-imagine themselves and the way they do business. It isn’t true that people are not spending at all to get a new vehicle. They are, but it’s a different way of doing business. Automobile dealers are resourceful business men/women, and have found new ways to go about selling their inventory-and running their dealerships-in different ways. Some are investing heavily in used vehicles-buying them outright from consumers, searching out good buys at auction, etc. One case I heard about is the dealer who bought up 5 million in used cars and selling them as if they were ‘new.’ He was selling these vehicles as if they were new cars: full tank of gas, customer service, same as “new.”
Other dealers have chosen not to raise prices or putting more money into the consumers’ trade. Dealers more and more are becoming a one-stop business. Not only can you buy a vehicle from a dealership, you can service it there and insure it there. Many dealers are a big part of the communities in which they live and work, therefore, they add value and people see them that way.
The average price of a new car today has been purported to be somewhere between $41,000-$46,000. This is tough, or impossible for many buyers. Dealers do look at what they can provide to buyers: insurance, financing, etc, and try to be the center of car buying.
There are so many questions to ask and have answered: such as, will new car prices plateau, will manufacturers begin to build and offer affordable cars, will electric vehicles become more affordable. No doubt, the industry will look somehow different several years from now. What does it really mean to buy a car online? Will consumers be able to skip a dealership visit? Much like the healthcare industry, it is changing to make lives easier for the consumer.
While normal levels of the automobile business will return, sitting back and waiting a bit longer may be the safest approach, for now.