New car sales down 10% in CO due to supply constraints
DENVER – Getting a new car these days takes a lot of patience.
“Things haven’t really improved, and we see that the chip issue is still a problem for all manufacturers,” said Kevin Shaughnessy, vice president of operations and partner at Phil Long Dealerships.
Supply and labor constraints continue to weigh on new car inventory across the state.
According to the Colorado Automobile Dealers Association, new car sales were down 10% statewide and 15% nationally in the first quarter.
“It’s not a demand issue. The demand for cars is higher than it’s ever been. But we have a supply issue,” CEO Tim Jackson said.
While Ford’s Shaughnessy store in Denver isn’t doing nearly as badly as the statewide figure, its inventory of new cars is limited.
“We have over 100 and some here at this place. We have about twice as many used cars,” he said.
And that’s more than some other dealerships have, with some reporting that they only have a few new cars on the lot.
Due to this demand, dealerships are pre-ordering vehicles for customers, which can result in wait times of weeks or months.
“It was a slice of the business [before the pandemic]. It could be 10% or 15% of the business. Today we find that about 70-80% of businesses are people who custom order what they want because the selections are low,” Shaughnessy said.
When things will get better depends on who you ask. Shaughnessy says he expects that to happen within the next year. Jackson has a darker view.
“I don’t think it will correct itself in 2022 and it may not be completely corrected in 2023,” he said. “It may be necessary to wait until 2024 before returning to a more normalized market in the automotive sector.”