Digital Exclusive: Car dealerships meeting demand despite computer chip shortage

Digital Exclusive

Too much demand for not enough supply is a common theme across many industries since the COVID-19 pandemic began in March 2020. But what is currently happening in the automotive industry is as far from normal as can be.

“I’m 61 years old, and I’ve been in the car business since I was 18,” said Mark Winkler, owner and general manager at Champion Ford/Volvo. “I’ve never seen it like this. This is the weirdest [the car business] has ever been.”

Car dealerships around Erie County and the nation are waiting for new vehicles of all makes, both foreign and domestic, because of a shortage of semiconductor computer chips, due to the pandemic. These chips are used in all electronics, from cell phones to microwaves to game consoles to TVs, as well as all modern cars, trucks and SUVs. Your car will not even start without a computer chip because there is one in your key fob.

Without these chips, automobile manufacturers are cutting their production, sometimes alternating which plants can work to keep workers earning income, according to Winkler. He added he had spoken with a higher-level representative from Ford and found out “20,000 to 30,000 Ford F-150s that are built and ready to go” are waiting on various lots for chips to be installed and programmed.

Jason Porreco, owner of Bianchi Honda, said Honda has the same problem, even though Honda is America’s most domestic imported car make in the world.

“A lot of [our Hondas] are sitting in Alabama; a lot of them are sitting in Marysville, Ohio, waiting for these chips” Porreco said. “So, as soon as we get these chips, we should get the cars within a week.”

In Waterford, Matt Clark, general manager of Humes Chrysler Jeep Dodge Ram, said his supply before the pandemic was always close to 400. Now, it’s about 200, due to manufacturers restricting how many vehicles he can receive at a time. He has inventory available at about “a 1:1 ratio” — for every new car he sells, another new car is on the way to replace it. However, customers need to be willing to compromise.

“In most cases [currently], customers are accommodating, flexible and willing to realize, ‘If I buy this today, I may have to give up the interior color I wanted’ to get the overall vehicle and the price on the deal.”

However, the three dealerships we spoke to all said if you have to have a certain color car with a list of non-negotiable features, your order will be put to the top of the production line — regardless of make — and you can get it within six to eight weeks.

For those that need a vehicle immediately, “used” may be a better option.

“Certified pre-owned cars are a great alternative,” said Winkler. “We check them for over 150 items. It comes with a warranty that’s better than actually a new-car warranty. The manufacturer stands behind it and the dealer you buy from will stand behind it.”

And if you have a car you want to get rid of, there has never been a better time in history to trade in your used car. A representative from Greater Erie Auto Auction said used cars “are appreciating in value” — the complete opposite of the traditional saying that a car “depreciates as soon as you drive it off the lot.” According to Porreco, dealerships are having to pay retail prices at auction for used cars instead of wholesale prices.

The inventory is what matters, and while all three dealerships said they have plenty to choose from, Clark said buyers need to be ready to make a deal.

“There isn’t a week or two to think about it [anymore],” he said. “You better make the decision now if that’s the [car] you want.”

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