Jul. 11—New car shoppers are finding slim pickings as supply-chain issues and a number of other factors hitting the industry have left consumers with an extremely limited inventory, local car dealers say.

Atlanta-based Cox Automotive recently projected that 2022 will have 17.3% fewer cars sold than 2020. The automotive conglomerate also reported the average new car payment has risen to $712 per month and used car prices are at record levels.

Steve Ewing, owner, president and CEO of Wade Ford in Smyrna, said the disruptive shortage of new cars began in March 2020 when manufacturers shut down due to the pandemic. The dealership, which receives its vehicles from the Ford Motor Company, has experienced a ripple effect due to supply-chain issues at the manufacturer level, he said.

"It immediately affected the amount of vehicles that were being delivered to us on a daily basis," he said. "Wade Ford normally would keep 400 to 500 cars in stock at all times. And now we're under 100 (new and used) vehicles."

A dip in chips

Delays in overseas shipping of auto parts — specifically auto microchips — can be blamed for many of the empty parking spots at the Wade Ford dealership, Ewing said. Supply-chain issues in Taiwan, a large exporter of car chips, and a fire at a Japanese plant in March 2021 have exasperated the circumstances.

The shortage of new cars for Wade Ford have been caused by parts being shipped from overseas, specifically auto chips, Ewing said. These issues were exasperated by a fire at a Japanese plant in March 2021 and supply chain issues in Taiwan, a large exporter of car chips.

Ewing said his dealership is trying to combat the low inventory by selling more preowned vehicles, though pricing of used cars has gone through the roof.

"It's actually gotten so bad that in some cases, we're actually competing at auctions with rental car companies such as Hertz, and some of the other rental car companies because they're keeping cars in their fleet longer. (They) would normally flip out cars after a certain amount of mileage. They're keeping them and then they're having to supplement them with used vehicles."

When asked for solutions, Ewing said it will take changes to how consumers purchase their vehicles and time.

"The manufacturers are converting to a bill-to-order process, which is relatively new to the auto industry ... all the manufacturers in domestics are trying to have the consumer change the way they purchase vehicles," he said. "[That means] ordering vehicles online, waiting for a vehicle and getting it built exactly how they want it, which is eliminating the manufacturers from having to stockpile vehicles and have unsold product. That means that they can now order product from their suppliers because they know what's going on a car specifically built for a consumer."

Repairs affected, too

Jason Graham, general manager of Ed Voyles Chrysler, Dodge, Jeep, Ram Marietta, said there are issues for both the service and sales departments and called the current state of the auto industry "a nightmare." At his dealership, Graham said there's a 10-day waiting list just for customers seeking service on their vehicle to get their car seen. He of all people understands how frustrating it is, stating his own car is in need of repairs.

"Because parts are on such backorder ... it's horrible for customers," he said. "If your car breaks down, you obviously need it immediately. Well, it could be a week, two weeks, a month before a part even comes in to have it repaired. So that's a constant struggle with that side of the house."

On the sales side, Graham said he gets five to six notifications a week from manufacturers saying vehicles are on restriction and the dealership can't order them. Specifically, heavy-duty vehicles assembled in Mexico have been nearly impossible to get, he said.

For his sales employees, Graham said he's getting notifications five to six times a week from manufacturers saying vehicles are on restriction and the dealership can't order them. Specifically, heavy-duty vehicles assembled in Mexico have been nearly impossible to get, he said.

"There is a constant backlog of those types of vehicles for the simple fact that they cannot get them out of Mexico in a timely fashion because they're not allowed to come across the border, I guess, on a vehicle or a train," he said. "They actually have to go through a port."

These issues have created a significant strain on the dealership's inventory, Graham said. While the lot typically holds more than 600 cars at a time, their current inventory is closer to 150 new and used cars.

"We are very lucky to have those," he said. "There are other manufacturers like Ford and General Motors who — I hate driving by some of these guys' lots because they might have six new cars on the ground."

Unprecedented times

The lack of inventory has created a new phenomenon Graham said he's never seen in all of his 23 years in the car business: appreciating used car values.

"People are getting more for their vehicle now than maybe what they paid for it two years ago," he said. "Because there's a such a shortage of new vehicles, it obviously creates a shortage of preowned vehicles so preowned are going for a premium."

While Graham said it appears the prices of used cars have finally plateaued, he projected these car industry constraints will last well into 2024, if not 2025 and 2026.

"If you see a car you like and you want it, go ahead and get it because it might not be there tomorrow," he said.

Steve Lang, owner of used-car dealership Keepers situated on the Cobb-Paulding County border in Hiram, said he's been in the business for nearly 20 years and the hardest issue he's currently facing is getting access to used parts. He likened the experience to a scavenger hunt.

"We often have to wait several weeks to get the right part for an older vehicle," he said. "And sometimes, the part isn't even available because the manufacturer discontinued it."

To combat the issue, Lang said his dealership has started buying used cars from a wider radius than before to maintain an inventory of about 80 cars on the lot at a time.

"That helps considerably," he said. "I do have to compete against other dealers from several states away. And that also inflates the price for used cars and trucks."

Lang said he's been dealing with issues for two years, since the start of the pandemic.

"Every month since (the pandemic) has become more acute," he said. "I'm now buying... vehicles that don't run and fixing them, and getting them back to a frontline unit."

In addition to the supply-chain issues, Lang said the highest rates of inflation in 40-years have also caused a strain on the car business.

"Everything costs more to repair and more to buy," he said.

When asked when he believed these issues would resolve, Lang said it would take years.

"But when the new car manufacturers have the chips needed to build new cars, everything else will slowly get back to a new normal," he said. "Deflation will probably not happen for parts because they are indispensable for older vehicles and there will always be a demand."

Lang advised customers not to spend money on a new car now, but to sell their extra vehicle if they have one. He said if consumers are patient, the market will change, likely in the next 12 to 18 months.

"If you have an extra car, sell it and then use that money to keep maintaining your other vehicles," he said.