Axios - Car shortage could change buying behavior forever

therumblewagon

Moderator
Moderator
Joined
Jun 22, 2021
Threads
24
Messages
972
Reaction score
2,335
Location
Florida
Car(s)
CX-5
I say good, bring it on!

--

https://www.axios.com/cars-shortage-made-to-order-35d24a0f-690b-43f4-aa3a-3f65aef2969c.html

Car dealers' annual year-end sell-a-thons have turned into wait-a-thons for many shoppers unable to find the vehicle they want on dealer lots — but that could be about to change as some companies modernize the way they sell their cars.

Why it matters: Supply chain disruptions could have a silver lining for automakers if Americans can be trained to order the exact car they want — color, features, bells and whistles — and then wait a month or so for it to be delivered.
  • This is how Europeans have been buying cars since World War II, when money and materials were in short supply and factories were struggling to recover.
  • But Americans are accustomed to going to the dealership and driving home in a shiny new car off the lot.
What's happening: Some companies say they plan to capitalize on the inventory crunch to permanently shift to an order-based system, starting with their new lineups of electric vehicles.
  • Ford Motor, for example, is trying a build-to-order scheme with its new Mustang Mach-e, which is in high demand.
  • And Ford is offering a $1,000 discount to customers who pre-order any vehicle.
What they're saying: "You cannot imagine ... how much money we waste by not -- by guessing what our launch mix is for a new product," Ford CEO Jim Farley told investors and analysts in October.
  • A build-to-order model, he says, is a far more efficient way to run the business.
Between the lines: Packing lots with large numbers of cars, trucks and SUVs is a huge drain on profits for both dealers and automakers.
  • Dealers have to cover the cost of financing all those cars sitting around, waiting for a buyer.
  • And automakers usually wind up producing more cars than they need to, in hopes of satisfying every shopper's desire. That means more parts, more labor and more cost.
  • Inevitably, though, they end up spending more on advertising and incentives to clear out the slow sellers.
Yes, but: Automakers have tried before to switch to a build-to-order model, with little success.
  • "Americans have no patience. We're too impulsive," said Michelle Krebs, executive analyst at Cox Automotive.
  • "Right now, we’re in an unusual situation, so people are putting their dibs in," says Krebs. That doesn't mean it's a new business model.
It's been a hard lesson for newcomers like Polestar, the Swedish electric car manufacturer spun off from Volvo, which had to tweak its U.S. strategy.
  • It had planned to deliver customer-ordered vehicles to stores, which would carry no vehicles on their lots.
  • But franchised Polestar dealers discovered impatient buyers wouldn't wait, and they risked losing sales to competitors.
  • Now, Polestar furnishes retailers with five to seven cars for spot deliveries.
The bottom line: The pandemic finally made it possible to complete your car purchase online without ever setting foot in a showroom.
  • The big question is whether ordering the exact car you want from the factory is next.

Editor's note: Cox Automotive's parent, Cox Enterprises, is an investor in Axios.
 

Donalex

Well-Known Member
First Name
Don
Joined
Sep 19, 2021
Threads
14
Messages
457
Reaction score
836
Location
Clearwater
Car(s)
1995 Nissan 300ZX
Nope, never. The dealers won't have it. Their profit centers are service, parts, and used cars anyway.
 
Top