Automakers Want To Keep Dealer Supplies Low

Jul 25, 2022 2 min read
Automakers Want To Keep Dealer Supplies Low

You’ll get what they give you and be grateful for it…

Thanks to a shortage of computer chips for cars as well as other components worldwide, automakers have become used to doling out few vehicles to dealerships. Even though some of the problems are being straightened out with the promise of chips and other components being in high supply soon enough, it looks like many are planning to keep dealership stock low, giving car shoppers less leverage.

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For decades, many automakers have dreamt of what they’ve had during the pandemic instead of having to predict what customers might want, only to have dealers hold year-end clearance events to get rid of old stock. That’s why a report from Reuters details out how they’re trying to mimic Teslas “bare-bones approach to car options.” If you’ve ever taken a serious look at a Tesla, you know what that means. This strategy is being used to maximize profits while customers get less car for their money.

However, the Reuters report makes it sound like automakers are going this route because all the supply chain issues won’t be worked out for years and years. A growing number of consumers have become suspicious they’re the victims of forced scarcity, suspecting automakers and others have purposely cut back on production so they can increase profit margins. There’s no known proof that’s what’s happening, but the suspicions prevail.

Customers who want to order a highly customized vehicle might have to wait months on end for that privilege. That also could be the only way to get anything other than some stripped-down car, although shoppers will definitely pay more for their purchase.

This marks a huge departure from the days where automakers flouted their ability to make a car to exactly your specifications from the factory. Many brands would encourage customers to add all kinds of additional features, with Mini even offering personalized parts through 3D printing. Those days aren’t entirely gone, but there is considerable movement in the industry toward cookie cutter production, especially for non-luxury brands.

With consumers conditioned to accept less while paying more, it seems like those inside the industry who have been fighting for this forced simplification of vehicle options are winning out, for now. As a bonus, this movement helps with automakers switching to manufacturing EVs.

While speaking to Reuters, S&P Global Mobility analyst Denis Schemoul spun the situation as a win for consumers, pointing out it will be easier for customers to find the bland car just like everyone else’s that they supposedly really want. "The reduction in diversity benefits everyone," he said. "And everyone will follow, even the Germans."

Source: Reuters

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