You would have to be living under a rock to not know that a global scarcity of microchips is wreaking havoc with auto production and causing shortages of new and used vehicles.
Despite widespread media coverage of the pandemic-related ills challenging automakers and as well as dealers, there are still non-believers and conspiracy theorists out there.
Greg Carrasco, an Oakville, Ont., auto retailer and host of a national weekly radio show, has confronted both listeners and customers who believe that the inventory shortage is a sham, concocted by car makers to inflate prices.
“From time to time … I’ve received a bunch of calls on the show from people saying this is all just a [price-fixing] scheme,” said Carrasco, general manager at Oakville Nissan and Oakville Infiniti.
In Carrasco’s showrooms, some customers are unconvinced that he can’t meet their price until they’ve shopped around at competitors in a futile exercise to get a better deal, he said.
“We try to convey logical reasoning in the price position because if we don’t sell them [vehicles] for what we’re supposed to, we wouldn’t be able to keep the lights on.”
Admittedly, the conspiracy theorists constitute a small minority, but such cynicism surprised Carrasco.
“It’s based on misconceptions about the car industry. I didn’t understand how cynicism sometimes takes the best of us ... I didn’t realize it was ingrained about car dealerships in 2021.”
To educate consumers, Carrasco uses his radio show and online advertising to set the record straight on inventory shortages and lengthy waits for vehicles.
“We tell people, there’s a lot of noise in the marketplace about the shortage of semiconductors, and it’s true. If you’re looking at buying a vehicle within the next two, three, four, six months, go to the local store and touch the vehicle you’re buying, because if you place an order, most dealerships don’t have the ability to guarantee you’re going to get this order.”
If an order is placed, the dealership will keep the buyer abreast of that unit’s progress, he said.
As with dealers across the country, Carrasco is in a delicate balancing act: Generating sales while managing customer expectations as well as educating them about the forces that are squeezing inventory and driving up average transaction prices.
Dealers need to temper the promise of a new vehicle with the reality of production disruptions and lengthy delivery waits.
The steady flow of product to dealer lots isn’t expected to begin until early spring, says Carrasco. But much of that flow will be designed to clear up the growing backlog of vehicles on order.
That means, he says, another year of tight supply and managing customer expectations.
