It’s no secret that the automotive industry has struggled these past few years due to low inventory, increased wholesale prices, and ongoing supply chain issues. And while many of those problems still largely remain the same, there are a few changes within the industry that dealerships should anticipate.
And with Summer just around the corner, there are a lot of things beginning to change in the auto industry, both good and bad. To help prepare you for the upcoming Summer season, we’ll be sharing a few things that car retailers should be fully up to date and well aware of.
There’s both good and bad news for the auto industry: starting with the bad news, inventory is still incredibly low – 2.4 million vehicles lower than this same time in 2020. But there is good news – there are roughly 30,000 more vehicles in stock as compared to last month, with roughly 1.1 million units in total.
This slight uptick in vehicles is definitely an improvement, and may very well be an indication of the auto industry making its slow and steady recovery. Of course, it will still take time for things to get back to where they were a couple of years ago but it’s great to see inventory up at all, even if it may just be a marginal improvement.
Used vehicle prices still continue to climb, with prices rising by 0.7% from March 2022 to April 2022 and increasing by 13% over the course of the last twelve months. This isn’t a huge surprise, as the new supply chain still struggles to keep up with demand. As new vehicles continue to be rare, the prices of used vehicles are higher than ever before.
And because wholesale prices are more expensive, this is forcing dealerships to increase their prices as a result. Various prominent used car retailers have reported losses across the board, with even CarMax– who historically has done very well in the past couple of years– reporting a decrease in unit sales by 2.7% earlier this year. And increased wholesale prices mean a loss in profit for the resellers, as well as the need to increase prices, which is bad for both the consumers and retailers alike.
Due to multiple factors, used electric vehicles have seen a sharp increase in price. This has been due to both the rise in gas prices and the shortages of new EVs, as well as the chip shortages in general. But it seems as though EVs will continue to rise in price in the ongoing years as well.
Because of the looming shortage of lithium, experts have estimated that EV batteries will skyrocket in cost over the next several years by approximately 22%. This will undoubtedly be bad news for consumers, as the cost will be passed onto them. But this may also spell bad news for dealerships as well, as increased prices may also dissuade potential buyers from purchasing a new EV. However, seeing as how high EVs already cost, this may have a smaller impact on sales than some are anticipating.
In order for auto industry workers to stay prepared, it’s important to have all of the most advanced tools at their disposal. Consider using Super Dispatch, which is an advanced transportation management software (TMS) that allows dealerships to keep better track of their inventory, easily ship vehicles, communicate directly with car haulers, track shipments, and more. Request a demo from us today!Published on May 26, 2022
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