An unexpected silver lining to the yearlong coronavirus crisis has been record profits for auto dealers, as consumer demand for heavily optioned crossovers and pickups keeps transaction prices and gross profits high.
But dark clouds are moving in again.
Shortages of semiconductor chips continue to crimp global auto production, bringing inventories of popular vehicles — even American pickups — to worrisome levels on some dealership lots. Improving weather and widespread COVID- 19 vaccinations could now push retail traffic even higher — meaning still-tighter vehicle supplies if chips remain scarce.
"Our inventory level is dwindling to a fraction of what it's been in the past," said Jim Moshier, general sales and service manager at Ricart Ford in Groveport, Ohio. "It looks like it's going to be a pretty desperate April.
"I'd say we're at 20 percent of our F-150 inventory that we're used to. I usually keep a few hundred Super Dutys on the lot. I literally have 12."
His inventory of all models combined is normally around 1,100 vehicles, Moshier said last week. But at the moment, he's got 250.
"As selection dwindles, it makes it tougher to sell. There's so many different combinations that it's narrowing out a chunk of customers," Moshier said. "Customers are settling for the vehicle that's second or third choice. They'll settle for different equipment or color than what they expected."
Because of the microchip shortage and the resulting supply line interruptions, Ford Motor Co. last week announced a series of production cuts at its Dearborn, Mich., truck plant — including a two-week shutdown in April and the cancellation of overtime shifts into June. Its other F-150 plant in Kansas City also is being idled for a week this month and overtime shifts are being canceled. Elsewhere, Ford is cutting back crossover production.
Moshier said that Ford has indicated there will be an influx of vehicles in May, but that's unlikely to bring inventories anywhere near normal levels.