The state of the auto industry: Where dealerships and buyers currently stand
PITTSBURGH (KDKA) - It's Pittsburgh International Auto Show weekend and that's often considered the unofficial kickoff of the spring car-buying season.
The last few years have been a challenge for the auto industry - empty lots, supply chain issues, and shuttered plants, but they say that it's starting to come around.
Sparse lots are filing up again but the auto industry's flux has far from settled and the process has certainly changed.
"Is it permanent, or will it revert back to how the people purchased cars three, four, five years ago?" That's the question the owner of #1 Cochran, Rob Cochran posed.
Cochran sells most brands across his dealerships.
"We've seen much greater build-up with certain brands and other brands, there really has not been any change over the last 12 months," he explained. "Things are certainly a lot better than they were a year ago."
CBS News Automotive Correspondent Jeff Gilbert said that the manufacturers aren't motivated to return to jammed car lots.
"It's because they don't have to put as big of a discount on, their dealers don't have to stock as many vehicles, so they have made some changes because of that," he said.
However, Cochran said the days of making deals are coming back slowly.
"On certain brands where inventory has begun to amass, there's an ability in many cases to buy a car below MSRP, which wasn't the case over the last 12-18 months," Cochran said.
Meanwhile, Gilbert said he expects we might start seeing some incentives and deals later this year.
Plus, Gilbert and Cochran agree - the car show has taken on a new role in this environment.
"[Buyers] can narrow down their wish list as far as what they think makes sense for them," Cochran said.
"This actually increases the importance of an auto show a little bit because it's harder to just run down to your dealer and see what you want," Gilbert added.
While some brands will now give you a better chance of finding something on the lot that you like, buyers still are showing patience and a willing to wait for the one they really want, even if that takes months.
That said, the chip crisis isn't over just yet. It's better, but the dealerships are choosing to put the chips in the vehicles that will net them the most money and those are the higher-end, more loaded vehicles.
So, that leads to a lot of people being priced out of the brand-new car market.
Those shiny, new fenders, sleek styles, or spacious interiors are certainly enticing but most can't afford that right now.
"The average price of a vehicle is now approaching $50,000," Gilbert explained. "A lot of people are being priced out of the new car market and are in the used car market."
Cochran agrees.
"The cars have all gotten much more expensive over the past two to three years," he said. "You know, the high 40s are the averages that I saw for transaction prices on new [cars]. The impact on the used car market...there are more people considering used vehicles."
Gilbert expanded, saying that the used car market is already twice as big as the new car market.
"You can still find things in the used car market that are still fairly decent for under $20,000," he said.
Now, used car prices were receding from their pandemic peak, Gilbert said in the past month or so they have been bumping back up.
"The shortage of supply with used [cars] has driven up pricing as well," Cochran added.
And that point puts the challenge on the dealerships.
"A large portion of the market that we need to come up with, products and payment options, and things that fit into what they're willing to do," Cochran said.
Of course, inflation hasn't helped with any of this, pushing prices higher for vehicles and loans.
That doesn't mean waiting is the main play - inflation will only push up prices, new and used, with the only exception being there may be for manufacturer incentives coming later in the year.