AutoNation Inc., the largest U.S. car retailer, is warning new-vehicle inventories remain thin as automakers miss resupply deadlines, which may mean fewer choices and higher prices for buyers.
Chairman and Chief Executive Officer Mike Jackson told analysts on an earnings call Wednesday that he expects shortages will last at least through the end of the year.
“We’ve had, of course, running conversations with the manufacturers since this spring, and every target has been missed,” Jackson said on the call. “What we’ve been told we would be shipped, it simply did not happen.”
U.S. carmakers have struggled to ramp up production after a two-month long shutdown this spring to contain Covid-19. While consumer demand has rebounded thanks to low interest rates and a shift towards private transportation, automakers have been stretched thin by absenteeism, distancing protocols, quarantines and supply-chain constraints.
Auto dealers have been selling more used cars to supplement the shortage of vehicles rolling off assembly lines. They’ve also benefited from rising prices: AutoNation reported record third-quarter results due partly to greater pricing power.
General Motors Co. faces tight inventories for trucks such as its Chevrolet Silverado and GMC Sierra and is running pickup plants on all three shifts, it said earlier this month. Low supply also hampered BMW AG’s third-quarter sales, causing it to fall to third place among U.S. luxury brands.
– By Gabrielle Coppola (Bloomberg)
