Auto dealers face inventory shortage ahead of Labor Day sales

According to a recent industry forecast, 55% of vehicles would be sold within 10 days of arriving at a dealership in August.

ENGLEWOOD, Colo. — Labor Day weekend has meant big sales for stores, including car dealerships, for a very long time.

But since the onset of the COVID-19 pandemic, dealership lots have struggled to fill with new cars.

According to an automotive industry forecast by JD Power and LMC Automotivevehicle stock-outs caused price increases in August.

In the report, Thomas King, president of JD Power’s Data and Analytics division, said 55% of vehicles would be sold within 10 days of arriving at a dealership in August.

The average number of days a new vehicle is in a dealer’s possession before being sold is on track to be 20 days, up from 25 days a year ago.

“Lack of inventory, coupled with strong demand, continues to allow manufacturers to roll back discounts,” King notes in the report. “Average incentive spend per vehicle is heading toward $969, down 47.1% from a year ago.”

To John Elway Chevrolet in Englewoodthere are ups and downs when it comes to inventory.

“If you had asked me that question a few years ago, you know, we’re a very large Chevy store, so we would have about four or 500 new vehicles in the field right now,” said general manager Jeff Silverberg. . “I happen to have around 22 and that’s the most I’ve had in months.”

Silverberg sees the amount of inventory as a “new normal” and says they’ve been working to adapt, as well as their customers.

“We just roll with the punches,” he said. “It’s our business and we’re here to solve the problems of needing transportation and that’s what we do.”

The issues facing the shortage stem from issues that have been raised before – COVID-19, a shortage of chips and more.

“Well, you know, with the shortage of chips, it depends. The more bells and whistles you get on a vehicle today, the clearer it is going to need chips. And therein lies your problem. “Silverberg said. “So if you get a more basic vehicle that requires less technology, we can probably get it from order to build to get it here within 2-3 months. Some high-end items could very well take 6 months. “

Overall, Silverberg advises new car customers to be prepared and patient.

“But if you’re looking for a new car, my advice is to plan and make your decision 4-6 months before you plan to come to the dealership for delivery,” he said.

Tim Jackson, President of the Colorado Automobile Dealers Associationsaid in a statement on Friday that used car prices were “finally” starting to come down.

“This will make it easier for some used car buyers to re-enter the market and get a more affordable set of wheels,” Jackson wrote. “This is good news for affordability.”

Jackson said in August they were at least a year and a half to two years away from some “normalization” in the market.

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