Worldwide, the automotive industry is grappling with shortages on a number of critical vehicle parts. Most discussed in recent months is the global shortage on semiconductor chips, which has caused massive disruptions to the supply chain and prevented new vehicle inventory from coming to market. But, most recently, the lack of foam and rubber have caused additional headaches for the industry, further complicating an already less-than-ideal auto environment.
Notably, consumer demand for vehicles remains high at this time, but new-vehicle availability is at an all-time low due to these shortages on parts and ripple effects from COVID-19. Some manufacturing plants have even shut down, closing their doors until these parts become available again. Additionally, automotive retailers, rental car companies and others have been forced to find unique ways to source high-quality used inventory to sell or use for their respective businesses – and companies that would normally be interested in selling used vehicles to retailers or other companies are holding on to those vehicles instead.
Here’s a breakdown of how the global parts shortage is impacting each of these respective auto players:
Vehicle Manufacturers (OEMs)
Without crucial vehicle parts coming in – semiconductor chips, foam and rubber, specifically – OEMs don’t have what they need to fully build, assemble and distribute out new vehicles. As such, many automakers have halted production temporarily, as they wait for these parts to come in. This includes the likes of General Motors, Mercedes-Benz, Ford Motor and many others, all either shutting down or idling plants in recent weeks and citing the shortages on vehicle parts as the reason for doing so.
This has been a huge blow to the industry, especially as it comes right after so many OEMs had reopened and started operations again, coming off the last year of major shutdowns due to the COVID-19 pandemic.
Automotive Retailers
Auto retailers have been grappling with, and working around, the reality of limited new vehicle inventory ever since the pandemic brought plant shutdowns and limited imports coming into the country. Now, this trend continues, but this time as a result of the lack of critical vehicle parts.
Fortunately, many retailers have already been learning to how to get creative when sourcing high-quality used inventory to sell – turning to auction houses, other dealers and even customers themselves to acquire more vehicles. While it’s a challenging market in terms of acquiring inventory, there is no lack of consumers interested in purchasing cars. In fact, consumer demand is at an all-time high, and an increasing number of customers are turning to vehicle retailers that offer them the convenience of online-purchase and home-delivery options.
Rental Car Companies
Facing similar dilemmas as many vehicle retailers, rental car companies have a lack of new inventory coming in. This has majorly impacted their business models, particularly as it relates to selling cars to customers or dealerships. Many rental companies sold off much of their fleets during the pandemic, when demand for rentals vehicles was low. However, now, these companies are facing issues sourcing new vehicle inventory to expand their fleet.
Stretched when it comes to bringing in new inventory, these rental car companies have been forced to hold on to the vehicles they have for much longer than usual. They, too, are looking for unique ways to source high-quality inventory to rent or sell, with many of them turning to auction sites or local retailers.
Fortunately, while the coronavirus pandemic severely limited travel and delivered serious blows to the rental-car industry, consumer demand for rental vehicles has again risen and continues to climb. For these companies, it has come down to ensuring they have enough vehicles for these consumers to rent and focusing on building out the inventory on their lots to the best-possible extent.
Companies with Fleets & Fleet Management Companies
Fleet-management companies (FMCs) and any other companies with fleets have also had to come to terms with the reality of very little newly available inventory. As a result, many of these companies are extending the lifecycle of their vehicles, holding onto older vehicles for longer and putting more resources and time into getting them repaired. Some are even choosing to put fleet units in storage temporarily instead of selling them off as they would in a more typical auto environment.
Because of this, there’s been an uptick in the number of FMCs and other fleet-owning companies that need support with compliance services, care and maintenance, vehicle transport and crucial storage options. These companies want to feel secure in number of available, road-ready vehicles they have, knowing they can pull fleet vehicles and put them to use whenever it makes most sense for their business needs.
Vehicle-Logistics Providers
Automotive logistics providers like ACERTUS are in demand right now, as so many different auto players work to navigate the global parts shortage and what means for their respective business options. With so many companies being forced to source used-vehicle inventory from multiple sites, carriers are stopping at more pickup and drop-off locations than usual – leading to tighter capacity constraints. On top of that, fuel costs continue to rise, so many carriers have raised their overall costs to try and combat these effects.
Fortunately, ACERTUS has been able to meet its many different customers’ needs and keep up its usual performance during this unprecedented time thanks to:
- A full suite of vehicle-logistics services, including drive-away services, home delivery, title and registration, compliance, storage and care and maintenance.
- The flexibility to scale up or scale down, capacity-wise, based on the specific business needs of each respective customer.
- Robust coverage on services across all 50 US states, Puerto Rico and Canada.
- Proprietary technology solutions to drive efficiency and visibility.
While the industry continues to face challenges, ACERTUS’ teams are committed to creating a simple, streamlined experience for customers, delivering on requested services and helping a wide variety of companies weather the ongoing auto-industry storm.
Learn more about ACERTUS’ vehicle-transportation solutions, available across the United States and Canada at https://acertusdelivers.com. To connect with one of our team members or receive a pricing quote on fleet-management options, contact us here or call us at this phone number: 855-ACERTUS (855-223-7887).
