Labor Day Car Shoppers Find Low Inventory, Empty Lots Due To Microchip Shortage
WALNUT CREEK (KPIX) -- First it was toilet paper, now COVID-19 is causing a shortage of computer chips and it's wreaking havoc with the automobile industry along with the tradition of Labor Day car buying.
On a normal Labor Day, the sales lot at Walnut Creek Toyota would be packed with new cars and customers taking test drives. But Monday, the huge storage lot next to the dealership was completely empty.
"On a normal year, this lot, we wouldn't be standing in it," said General Sales Manager Keith Hernandez." It would be filled brim to brim with 200-250 cars. As you can see, we don't have any in there today."
It's like that because the pandemic has shut down many overseas factories that produce parts and, in particular, the microchips that control all aspects of modern cars. In fact, General Motors shut down nearly all of its North American assembly plants on Monday because of the parts shortage.
Normally, Toyota Walnut Creek would have about 300 new cars on hand. Monday they had ten.
"It's kind of shocking," said car shopper Ricki Shore. "I've heard reports about the limited inventory, but when you actually eyeball it, and see all of these holes in the parking lot, it really hits home."
Shore wanted a new car but was looking at something used. Pre-owned cars are like gold for dealers right now and, in some cases, are selling for more than new cars would, if they existed, which they don't. So buying used cars has become as important to the dealerships as selling new ones.
"And we will pay more—way more than we probably should—for that car right now because we see the pipeline dwindling right now until the end of the year," said Hernandez. "So, yeah, please bring your car here, if you have an extra one!"
The dealership says it's holding the price of new vehicles steady, at one dollar below the manufacturers suggested retail price.
Karen Pratt was one of the rare people to get a new car on this Labor Day, but only because she ordered it two months ago and it just happened to come in on Monday.
"I would have liked to be able to test drive one, you know, but they just didn't have them. They go in and out so fast," she said.
It's yet another new reality brought on by the pandemic. Gone is the chance to kick the tires as new car buyers place orders to a factory website and wait for them to be delivered. The same thing is happening at every car company and every dealership in America and they say the situation will not improve until COVID is under control and factories can get back up to full production.
"This is just the nature of the beast right now, you know, because of COVID and everything," said Pratt. "It's just the way we're operating our businesses."
