More in Business:
By Mike Hazlip—
The most recent wave of the coronavirus may be in the rear view mirror, but the lingering impact of shutdowns and labor shortages during the pandemic are still dramatically impacting the new car industry.
At Maita Honda in Citrus Heights, the parking lot is noticeably less full than in prior years, with cars for sale strategically spaced further apart to make the lower inventory not appear so noticeable.
The local dealership is facing a problem seen across the country as a global disruption in the semiconductor supply chain is hitting the new car industry hard.
General Sales Manager Todd Broyles told The Sentinel on Friday that the dealership has a fraction of the new vehicles in their inventory for this time of year, saying inventory levels are “at record lows.”
“I’ve been in this business for 26 years now, and I’ve never seen anything like it,” said Broyles, noting the dealership currently has less than 20 new vehicles available during a prime selling season where about 250 to 300 vehicles would normally fill the lot.
Broyles said dealerships “across the board” are feeling the pinch in what he acknowledged was a perfect storm of increased demand for chips and a lower labor force manufacturing them. A 2021 fire at a Japanese semiconductor plant has also contributed to the problem, he said.
Road Show, the automotive news outlet of technology news agency Cnet, reported a shift in semiconductor demand fueled by the pandemic has also contributed to the current shortage. Vice President of global vehicle forecasting at AutoForecast Solutions, Sam Fiorani told Road Show that chip manufacturers shifted production away from automotive chips when demand went down during the pandemic.
Now that demand is back up, there aren’t enough chips to go around, and the problem is affecting dealerships across the country. In Michigan, Reuters reports Ford will halt production at one of their plants over the chip shortage and GM will halt production at a Lansing Grand River assembly plant — although GM’s decision was reportedly not due to the chip shortage.
Broyles confirmed that staff at Maita Honda have spaced new vehicles apart to make the most of their limited supply. The last time the dealership saw a lot full of new vehicles was last summer.
“We do have some vehicles that are readily available,” he said. “So if [customers] are willing to take a secondary color choice or different level of equipment, either higher or lower, then they can take advantage of what’s currently available.”
Currently, customers are waiting two months or more for custom new vehicle orders, Broyles said. Some companies are also limiting features in new vehicles until the chip shortage stabilizes, he said.
For Broyles, there isn’t much local dealerships can do as long as global semiconductor chip demand continues to outstrip supply.
“If we had the ability to build them, we’d be in our backyards and manufacture a little shop and probably do that ourselves,” he said.
Thanks for reading The Sentinel. You are either trying to access subscribers-only content or you have reached your limit of 5 free articles per 30 days. Click here to sign in or subscribe.