RALEIGH, N.C. (WNCN) — It’s been a long and bumpy road for auto dealers since the pandemic with issues over availability, interest rates and prices causing problems for them.
Now, with the auto workers’ strike dragging on, those problems will continue.
Gas prices fluctuate often, but with OPEC cutting back production to keep prices high and with war in the Middle East—those fuel prices will impact the auto market.
“Usually they’re related,” said Brian Moody, the Executive Editor of Autotrader.
The strike by autoworkers has dealers worried about the future.
“We’ve already been in a situation in the course of the last year and a half where we’ve had very small inventories, but we’ve been able to reload on a monthly basis to a certain extent, said auto dealership manager Joe Mehling. “If the plants are shut down, we can’t do that.”
Moody said for dealers, running out of most cars won’t happen immediately.
“For some models, there’s more than a 100-day supply of new cars so we have plenty of inventory,” he said. “That’s the good news.”
However, he said, certain vehicles like truck-based SUV’s are in shorter supply and if the strike drags on, we’ll see rippling impacts in both the new and used car markets.
“Those are the vehicles that the prices are going to go up first,” said Moody. “That’s further hampered by rental car companies.”
“If rental car companies can’t find those new [vehicles], they’re going to go to the used market and that could mean a raise in prices for used cars,” he said.
The strike is currently targeting three specific Detroit-based companies, Ford, GM and Stellantis.
The others are non-union shops and they are still producing vehicles.
Parts for repairs could also become problematic.
“Oftentimes the parts that we’re talking about are made by the same facility or alongside the new vehicles being produced,” said Moody.
“If you were an automaker or a supplier and you had limited capacity, you would produce the high-dollar thing, the whole car first. You would put your efforts into the whole car and then worry about the parts later,” he said.
With interest rates being the highest in years, it’s going to be more expensive for consumers to buy automobiles, so in 2024, analysts believe we’ll see discounts and other incentives to get people to purchase new vehicles.