Research published by Wards Auto reveals that dealerships are still looking to shore up their inventories in 2023, despite struggling with vehicle shortages for multiple years.
The findings were based on a Wards Intelligence survey of 300 auto-retail staffers throughout the U.S. Among other things, participants were asked to name the problems that had impacted them most during 2022, along with those they expected to encounter this year.
Over half of the respondents for both questions blamed vehicle shortages for their past, present and future woes. This answer may come as a surprise, given the supply chain recoveries which were visible throughout last year. However, while inventories certainly made modest improvements, consumers, who had put off car purchases in anticipation of a healthier economy, began to trickle back into the market, driving up demand and counteracting the inventory improvements seen in 2022.
Despite hopes that more new cars would arrive in the latter half of 2022 to help stabilize inventories, original equipment manufacturers struggled to meet their production targets, as evidenced by disappointing fourth quarter reports. Unfortunately, the poor numbers mean that shortages are also likely to last well into 2023, further prolonging the suffering of auto-retailers.
However, while dealerships remain frustrated over the status of inventories in 2023, there are still many areas of improvement they can focus on instead. Many of the respondents to the Wards Auto Survey expressed concerns over vehicle prices, staffing shortages, changing consumer habits, OEM requirements (such as Ford’s EV new standards) and competing businesses. Perhaps these problems are not as pressing in the face of empty dealer lots, but there are few retailers who would fail to identify with all three. Instead of focusing on matters largely out of their control, dealerships can focus on what they can change. If they do, when a market normalization finally arrives, auto-retailers will be fully prepared to hit the ground running.