Auto Dealers Say Chip Shortage Could Pinch Supply Into Q3 – RVBusiness

Publicly traded dealership groups are mixed on how much pressure they’re feeling from the new-vehicle inventory squeeze borne from the microchip shortage. Some see vehicle shortfalls getting worse as spring goes on, according to a report by Automotive News.

But they aren’t hitting the panic button. Not yet, anyway.

Penske Automotive Group Inc. had a 40-day supply of new vehicles at the end of March, down about 20 percent from the end of December. CEO Roger Penske acknowledged last week that inventory “is not in great shape.”

“We think there’s pressure on some of the key models,” Penske told analysts after the retailer reported first-quarter earnings.

Many public retailer executives said supply problems were worse for domestic brand vehicles and that having diversified dealership networks had helped them weather the crisis so far.

Penske Automotive, for instance, heavily sells luxury and import brand vehicles, with just 1 percent of global dealership revenue tied to domestic brands. Inventory was in “decent shape” for many key brands such as Mercedes-Benz, BMW, Audi and Porsche, Roger Penske said last week.

“If things get tighter through Q2, we could then have more impact in Q3,” he said. “So I think the diversification that we have in our overall business will certainly help us from the standpoint of still generating a solid bottom line.”

Click here to read the full report by Automotive News.

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