With the auto industry stuck in a bit of an odd place recently due to the economy, recent world events, and an ongoing chip shortage, many car dealerships are unsure of the auto industry’s future. In this post, we’ll be going over some of the recent developments within the auto industry, and share what car dealerships should expect going into the month of May.
New Car Sales Are Lower Than Ever
Recent reports have shared that new car sales have fallen to the lowest first-quarter sales in nearly a decade. For some in the industry, this is coming as no big surprise. But what is the reason for this big drop in sales? Experts say that it’s due to both the shortage of new vehicles and the sharp increase in car prices that have caused less affluent buyers to walk away.
CoPilot CEO and co-founder Pat Ryan commented on this matter by stating that new car lots are “nearly empty” across the country, which has caused dealers to raise the prices of newer used cars. Ryan added that the one positive to this is the fact that “the continued high car prices… gives consumers with an extra car to sell [an] opportunity to cash in on record-high prices.” Since there’s a massive shortage of new cars, consumers can sell their old vehicles for more than normal.
Going into May, new car sales aren’t expected to grow much, due to the current trajectory of sales over the last few months.
Prices Will Continue Rising
Prices of both used and new cars are continuing to rise, say experts. As just one example, Tesla has increased its cheapest car, the Model 3, by $10,000 in the last year. Starting at $35,000 MSRP, the vehicle has skyrocketed in price to over $45,000 due to supply and demand. And though electric cars in particular have risen in popularity due to increased gas prices, the price hike has not been limited to them.
Many different models, EVs and gas-powered vehicles alike, have risen in price, both new and used. Both car shipping services and physical dealerships have adjusted their prices due to the shortage of new vehicles available, and show no sign of going down. This trend will continue as long as shortages remain.
Chip Shortages Will Continue Alongside War
Chip shortages have continued as a direct result of the overseas conflict, with many pre-existing issues such as inflation only making matters worse. Car dealerships should anticipate a lack of inventory going into May 2022, due to the massive shortage of new cars as a result of the chip shortage. This has been an ongoing problem for quite some time now, however it seems that the issue is worse than it’s ever been.
More Cars Are Sold Online Than Ever Before
It’s not all bad news, however – with the rise in popularity of services like Carvana, car dealerships are becoming more capable of selling to a much wider range of consumers. Online car sales, and consequently car shipping, have opened up new avenues for dealers, creating new revenue streams and are estimated to net dealers a higher profit.
Dealerships interested in getting involved with online car sales should consider services like Super Dispatch, which offers transportation management services (TMS) that allows car shipping to be easier and more efficient. Super Dispatch can help shippers track shipments, more easily file paperwork and reports, manage contact information, and much more. Request a free demo today!
