When Will Inventories of New Vehicles Stabilize?

The supply of new vehicles at dealerships has been a serious concern for many months during 2021 and it has caused a change in the market.

In fact, reports in the summer seemed bleak at best, with numbers hitting lows that we had not seen in many years. Although the same supply chain was in place after the pandemic as before it, there were hiccups along the way that have caused the vehicle shortage that we hope will eventually stabilize and give us models that we’re going to be able to buy anytime we want without worrying about delays in the process.

How Did the Pandemic Cause the Shortage?

Just as a recap, the pandemic hit, everything was shut down, and automakers canceled orders with suppliers, including those providing the semiconductor chips. Once dealers found a way to sell cars without any physical contact and through virtual means, it was too late. The gaming industry was booming, and the same chips that would have gone to automakers were heading to Xbox and PlayStation to be put into these consoles. This was only the top of the cause of the shortage, but once automakers submitted new orders, there weren’t any chips to be had.

Unfortunately, events unfolded, and three of the biggest factories producing these chips were shut down either due to events of nature or because of a strike. This caused the shortage to become even greater and delayed the final production of vehicles further than ever expected.

The Worst of the Shortage

June 2021 was the worst month on record regarding inventory levels of new vehicles at dealerships. At this time, the levels sat at 29 days worth of supply throughout the country, which meant dealers were scrambling to find vehicles. This caused the prices of used cars to go up to levels we’ve never seen, for new models to be rare and expensive, and for automakers to decide which vehicles they should produce and which ones they should put on hold.

The Trouble With Where the Chips Come From

Most of the semiconductor chips in the new vehicles we drive come from China and Korea. Both are companies that have a certain dislike for the US market, making it difficult for the chips to be sent to assembly plants in North America to make vehicles ready to drive in this area of the world. This is a serious problem and did not make it easy for automakers to finish many of the vehicles being made.

Legislating the Future of Semiconductor Chips

While we can’t snap our fingers and have a factory-built to create these chips, the US Senate did pass a $190 billion legislation package to help American companies compete with Chinese tech to build the items needed to make the chips for the vehicles being sold in North America. This bill still needs to pass the House of Representatives, but if faced with a shortage in the future, domestic companies will have a source of chips and electronics that can be provided to domestic factories.

Answering the Question, in General

The question being asked is when we will see inventory levels of new vehicles return to normal so that we can have enough vehicles to choose from. This situation may not reach the same levels as we saw before COVID-19 hit, but we should see most inventory levels return close to normal by the end of the first quarter of 2022. This situation has gradually improved since the low point this past summer. The entire industry will not likely see the same numbers as what we saw in 2019 until some time in 2023.

Which Models are StillShort at Dealers?

Audi –The Q7 and Q8 are running low on inventory levels at dealers but should be back to normal levels soon.

BMW and Mini –A shortage of hybrid X1 and X2 models is what we see at BMW dealers while the Mini Cooper is running low as well.

Buick –The GM plant shutdown has caused a shortage of the Buick Enclave, but this is not a semiconductor-related shortage.

Cadillac-Extended shutdowns at the GM plants that make Cadillac models have caused dealers to face troubles in keeping XT4, XT5, and XT6 models in stock.

Chevrolet –Another brand that was impacted by the lengthy shutdowns at GM plants is Chevrolet which shows dealers low on the Camaro, Equinox, Blazer, Malibu, and Traverse models.

Dodge –You might not find enough Dodge Durango models to find the one you want when you head to dealerships.

Ford –The pauses in production at some Ford plants has led to low inventory levels of the Bronco Sport, Explorer, F-150, and Mustang vehicles at dealerships.

GMC –The GMC Acadia is the vehicle that’s hard to come by when you head to GMC dealerships looking for new vehicles.

Jaguar, Land Rover, Range Rover –When Jaguar temporarily suspended production, the F, XE, and XF models were impacted along with the Land Rover Discovery Sport and Range Rover Evoque models.

Jeep –The numbers for the Jeep Grand Cherokee are lower than they normally would be right now.

Kia –The only model we see low numbers of for the Kia brand is the three-row Telluride SUV.

Mercedes-Benz –This luxury brand is having trouble bringing inventory levels back to normal, and you’ll find shortages of the C-Class, GLC, and EQC models right now.

Subaru –You may have trouble finding the Ascent, Impreza, Legacy, or Outback that you want to drive when you head over to the Subaru dealerships.

Be Patient, New Vehicles Will Return

If you have a vehicle that works great and gives you the driving experience you desire, you might want to wait out the shortage to ensure inventory levels return, and you can enjoy prices that make sense for the model you’ll buy. On the other hand, if you’re looking for a great new model to drive, you’ll find many of them at dealerships now, but you might have to order the one you want from the automaker and wait for that vehicle with your name on it to arrive after the production process.