Labor Day Weekend Car Sales Could Be Slow
Car buyers could find it tough to locate the traditional Labor Day weekend deals that had been a hallmark of the auto retailer calendar until the COVID-19 pandemic as dealers struggle to keep their lots full amid supply chain bottlenecks this year.
Many dealers have such low supplies this weekend they are actually cutting their advertising budgets this month and closing up shop Friday and Saturday rather than welcoming streams of buyers, according to a report in The Wall Street Journal.
The pandemic forced many car factories to shut down in early 2020, but even as they’ve tried to restart production over the past year, a global computer-chip shortage has hampered U.S. auto production and led to a shortage of available new cars.
“Customers are walking in and saying, ‘Hey, I really want this vehicle.’ Well, yeah, so do we,” said Scott Smith, president of Smith Automotive Group, which operates dealerships in the Atlanta area. “It’s been tough to meet all of the demand.”
General Motors Co. and Ford Motor Co. are both extending production cuts at several North American factories through September because of a lack of semiconductors, according to the WSJ report. GM Chief Financial Officer told investors and analysts last month that the automaker expects depressed inventories going into 2022.
The lack of new cars has led to increased demand for used cars, with both CarMax and Carvana reporting skyrocketing revenue in the past few months. Carvana’s revenue was up almost 200% in the second quarter after selling more than 100,000 vehicles, a 96% year-over-year increase.
See more: Carvana Revenue Up 200 Pct As Used Cars Remain Hot
Kelsey Mays, senior editor of car-shopping website Cars.com, told the WSJ that buyers should be prepared to travel to get their preferred cars. One of three shoppers on the site are traveling more than 100 miles to find their preferred make and model, according to the report.
NEW PYMNTS DATA: 58 PERCENT OF MULTINATIONAL FIRMS ARE USING CRYPTOCURRENCY
About: In spite of their price volatility and regulatory uncertainty, new PYMNTS research shows that 58 percent of multinational firms are already using at least one form of cryptocurrency — especially when moving funds across borders. The new Cryptocurrency, Blockchain and Global Business survey, a PYMNTS and Circle collaboration, polls 500 executives looks at the potential and the pitfalls facing crypto as it moves into the financial mainstream.