Short stock on auto lots drives car buyers away empty-handed
Car buyers searching the Twin Cities for a bargain these days are instead finding some empty spaces on the lots, as dealers are experiencing a big shortage of inventory.
The Japanese tsunami and earthquake in March crimped supplies of auto parts and caused new car production to drop off steeply for Subaru and other Japanese automakers in the U.S. and abroad.
As a result, auto sales in the U.S. rose just 1 percent in July from the year before.
Swati Avasthi is among those consumers coping with the crimped supply of models.
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She says she's used to using her imagination in her job as a book author, but not so much when she's test-driving a car.
And yet, a bit of creative thinking was necessary when she and her husband John Yopp recently took their family to test drive cars at Bloomington Acura Subaru.
With low inventories, the dealer didn't have in stock the version of the Subaru Forester they wanted.
The couple decided to test drive another version and tried to imagine it had the features they were looking for.
"The weird thing is this idea of, like, 'Drive this car and imagine that you're using a different one.' It might have the turbo of this, and the handling of that," Avasthi said.
"It's a Frankenstein," Yopp said. "You have to piece it together. You experience different cars. And you take different aspects of the cars and merge them and hope that you're right."
Charlie Rassouli, the general sales manager at the Subaru dealership, said he'd be selling about 20 more new cars each month if he could get his hands on the inventory.
Turned away, hungry car buyers look to other automakers, who also now experience a shortage due to the increased demand put on them by the tight supply or unavailability of Japanese-made cars.
That's according to Jeff Schuster, an auto industry forecaster at J.D. Power and Associates.
Korean manufacturer Hyundai and domestic makers like Ford, Chevrolet, and Chrysler have picked off sales from the Japanese companies, Schuster said. Now they're experiencing shortages on their lots as well. That's especially true in the case of small, fuel-efficient cars that are in high demand.
"It's not just a Japanese story. There's still significant shortages out there with specific vehicles," Schuster said. "And I think it's really something the buyers and the industry will have to deal with probably through August and maybe even into September."
Scott Lambert of the Minnesota Automobile Dealers Association says he takes the inventory issue in stride.
"I don't remember a year when the dealers weren't complaining about some sort of inventory problem," Lambert said.
Lambert said dealers always tell him they have too much inventory, or too little. And if supply really is tight, he reminds us part of that is due to the new post-recession environment — when auto sales plummeted during the recession, manufacturers started making far fewer cars.
"Now as we come a bit out of this, and there's a bit of a bounce-back in sales, we're finding inventories tougher to get at. And that's just the reality of the new manufacturing base in the industry," Lambert said.
In the meantime, used cars are filling in the sales gaps at many dealerships. They are in high demand and selling at a premium. That helps the bottom line at places like the Subaru dealership in Bloomington.
Still, General Manager Charlie Rassouli is confident that in two or three months he'll be getting as many new cars as he needs. Deliveries have already stepped up.
That could help him make a sale to Swati Avasthi and John Yopp. A few days after their test drive, the couple returned for another visit to the dealership. They say they're close to finalizing a purchase.
