Customers looking to purchase a new vehicle at one of Bill Jr.s dealerships outside Chicago are met with mostly empty lots.
People will come up to me and say: Are you guys okay?
Are you going out of business?
Walsh quickly explains hes not out of business, just low on options.
Were down to nine new Toyotas in stock.Our typical carry level is a hundred and forty to a hundred and sixty.
Walshs inventory is depleted because demand is strong amid a recovering economy,
and this coincides with a shortage of semiconductors or chips that control the electronic systems in most vehicles.
That led to a slowdown in vehicle manufacturing.
Were looking at thirty five percent of our normal carry level.And at a time when the market is churning so quickly, theres just not a way to keep ahead of it.
The global shortage of semiconductors is forcing manufacturers like General Motors to stop most production in North America of trucks.One of Walshs top sellers:
We typically have a couple hundred GM trucks, full-size trucks, in stock.
Were down to four or five between two stores.
I think they were expecting the demand of things to crash.John Dallesasse says automotive manufacturers are historically conservative
and in reacting to the lockdowns and layoffs brought on by the global corona virus pandemic,
adjusted their forecasts to reflect what they thought with the reduced demand for new vehicles.
In response to that they are reduced their forecasts, to the chip suppliers.
That caused them to reallocate their capacity to other places
and when the demand came back faster than expected, the auto makers no longer had a place in the queue so to speak.And that caused the shortage there.
Dallesasse says another factor in the shortage is the lack of domestic production.
I think in 1990 the US had thirty percent of the global semiconductor manufacturing capacity.
Today its down to twelve percent.A lot of that has gone overseas particularly to Asia.
It is the most challenging time that we have seen since Ive been back in the business in the family business for twenty nine years.As Walsh struggles to add inventory, hes not expecting a quick end to the crisis.
In talking to the manufacturers, the best case scenario is six months.
The more reasonable scenario is a year to two years.
Theyre talking about 2023 before you can see really a stabilization of the inventory.
In the meantime, Walsh and dealers across the country are trying to get creative with inventory that currently exists or can easily be produced.
We are working as hard as we can to source used cars to offset the lack of inventory on new cars.COX Automotive which gathers data on used cars reports
the average price for a used car in America topped twenty five thousand dollars in June, a record high.Kane Farabaugh VOA news Ottawa, Illinois.