For those that didn’t find the keys to a new vehicle in their stockings this year, it might be due to happenings behind the scenes in the auto industry.
Across the globe, car manufacturing facilities have seen plant shutdowns causing dealerships to have low inventory of new products due to a shortage of the semiconductor microchip needed to make the vehicles.
A projected total of more than 11 million vehicles were lost this year globally as a result of the microchip shortage, according to a report released this week.
Marion County has been no exception to these effects, with new and used dealerships alike seeing competition for used cars, as the market has transitioned due to the lack of new vehicles to sell.
Dave Columber, general manager of Mathews Honda / Acura in Marion, explained how unprecedented this production shortage has been for the industry.
What used to be a lot filled with roughly 250 new cars, the dealership had only nine as of Thursday.
“We kind of had to shift our whole way of doing business to something we’ve never had to do before, and I’ve been doing this for about 25 years, and I’ve never seen anything like it,” Columber said.
Business and marketing models of the past were forced to adapt as a result of the shortage, with Mathews Honda / Acura now selling over half of its vehicles to customers before the inventory even arrives at the lot, Columber explained.
He also noted customers have been patient and understanding of the challenges businesses have been facing getting their products with the supply chain delays and microchip shortage, but it could still be a long road to business “as usual.”
“It’s not going to be an overnight fix. Even if they could get the chips right now, it takes so long to build the cars, and even if they worked a lot of extra hours building cars, the next problem is the transportation infrastructure. They just don’t have that many trucks to transport all these vehicles,” Columber said.
“It’s going to take some time. If anything, it’s taught us to operate a little leaner. Maybe we don’t need 250 new cars on the ground anymore, maybe it’s somewhere in the middle,” he continued.
Still, the local effects of the shortage seem to extend beyond Marion’s new car lots.
Honda’s Marysville manufacturing facility was shut down for weeks back in March when the chip shortage first hit.
The shutdown of the plant, which hires people from all over central Ohio, including Marion, was not an isolated shutdown across the industry, Columber explained, and is just an unfortunate byproduct of the microchip shortage.
Without the chips, there can be no vehicles.
“Marysville being so close to us is very important to us as a local Honda dealer. You know, it employs a lot of people here in Marion, and we do get a lot of vehicles from them,” said Columber.
“They all over the last several months have taken turns having shutdowns, and it has affected all of them. They might make a certain model for a while and then take a shutdown to work on a different model, so that way, they can still get all these different models out there and use these chips wisely,” he said.
Columber also added that now is a good time to purchase a new car, availability permitting, as the value of used cars has skyrocketed due to the increased competition within the industry.
However, this very competition has taken a toll on used car dealerships, who are now competing with larger dealerships who have transitioned into the used car market to a greater extent.
Joe Ballinger, owner of Midwest Auto LLC in Marion, described the way the shortage has affected his business.
“Obviously it’s made it so there’s a lot less new vehicles to buy, so a lot of the people who would have bought new vehicles are being forced to buy used ones and it’s creating a lot more competition for those used cars that are left,” Ballinger said.
As the owner and operator of a family-run dealership that sells primarily trucks, Ballinger has seen a customer base of people shopping for used trucks with a lower budget being priced out of the market.
“They have just become insanely expensive in the last six months or so. One of the things it’s done, it has almost priced one of our customers completely out of the market, which would have been a customer of say an $8,000 truck,” Ballinger explained.
“That is a hard truck to come by nowadays, so that is a customer that almost doesn’t even exist for us anymore.”
In the place of this local customer base, Ballinger and his wife, Heather, have seen a rise in customers of an interesting demographic: people from outside of Marion.
“Locally for us, we sold a lot of the cheaper trucks to local customers, and those are the ones that kind of had been priced out of the truck-buying market. The more expensive trucks, those are a lot of out-of-town people, an hour to two hours away,” he said.
As the inventory shortages caused by the lack of microchips have hit surrounding states, combined with increased digital marketing, more people have been willing to cross state lines to purchase a vehicle.
“Lately, almost everything we’ve been selling has been out of state, like Pennsylvania, Indiana, so I’ve heard the shortage by some of those people is really bad, like, say Pennsylvania, I guess some of those car lots don’t have anything on them,” Ballinger said.
Tom Weston, general manager and co-owner of Mathews Dodge, Chrysler, Jeep, Ram of Marion, said that though he has seen consistent demand for holiday shopping, he has seen a greater number of customers traveling to come into his dealership.
“I think the demand is still there – people are just traveling from farther distances to find the vehicle that meets their wants and needs,” Weston said.
Along with this consistent demand for vehicles, Weston said he has seen recent evidence of the industry coming back from the shortage.
“It is definitely showing signs of improvement every week. Every week we see a few more cars get built, a few more options open up when you’re ordering cars, so I would say that it is showing signs of improvement, but to get things back to the way they were, I’m not sure how long that will take,” Weston said.
Though the in-person vehicle inventory at Mathews Dodge, Chrysler, Jeep, Ram is currently at 20 percent of its numbers prior to the chip shortage, Weston gave assurance that his team can still help customers get a new car. It would just require custom ordering directly through the manufacturer.
“If the customer does want a certain type of vehicle or a particular color or interior color and options, we can still make that happen fairly easily, just that instant satisfaction of going to the lot and picking it up is just not there right now,” be said.
Columber and Weston both said the lack of inventory caused by the chip shortage has caused challenges for their sales teams, who rely on vehicles in-store to get online leads with the current industry marketing strategy.
Through it all, Weston said his team members are adapting to the changes and doing the best they can to still serve their customers through
“We’re toughing our way through it, knowing there’s brighter days ahead,” Weston said.
Story by: Sophia Veneziano (740) 564 – 5243 | sveneziano@gannett.com