You may have heard of a “flea shortage”.
No, not the barbecue type. We are talking about a shortage of crisps that burns some companies like the auto industry.
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CBS 2 Morning Insider Lauren Victory takes us inside the local impact of a global issue.
Drive past Hennessy’s River View Ford in Oswego and you might do a double take. Client Tim Peterson did it.
âWhen you look at the lot, it’s a bit surprising and shocking,â Peterson said.
The concession inventory is zapped. Cars and trucks are strategically placed to make the land less empty, owner John Hennessey tells us. But “the glass is half full” for him because the supply is much better than a few weeks ago.
Right now there are around 20 new vehicles in the lot, down from just five or six earlier this month.
You can see the effect in the showroom where vintage cars from the 1990s are on display instead of the newer and larger ones. It’s a way to fill in the area and spark conversation. Creative adjustments are needed due to the global chip shortage that is slowing the production of cars and other products.
âIf we don’t have new vehicles for sale and someone wants a new vehicle, they won’t trade in their vehicle. So the used car market has also fallen in terms of volume, âsaid Hennessey.
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“Consumer reportsâEstimates that up to 8 million vehicles will not be produced this year due to chip manufacturing issues.
“So what are you doing? These are things that are beyond our control,” said Hennessey, adding that he was grateful for the patience of his customers and grateful to work with Ford because
The auto giant, like other brands, is selling more and more bespoke vehicles.
Customers can manually select features online with initial pricing.
âYou literally select the color you want, the wheels you want,â said general manager Jack Daniels while demonstrating the technology. “It’s so simple.”
The hitch – you’ll have to wait for delivery which is eight to 10 weeks for most models but up to six months for people like Peterson who have ordered newer styles (the Mach-E and the Bronco). A $ 1,000 incentive from Ford eases some of the wait.
âI came in for an oil change or a new battery and came out with a new car,â said Peterson, a self-proclaimed impulse buyer. “I’ve never ordered a car before and wondered if this would be the way of the future.”
It looks like at least some of the sales at Hennessey, with pre-sold vehicles accounting for around 40-50% of upcoming shipments these days.
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The Chicago Automobile Trade Association assures us that this empty lot is not an outlier. Many of the more than 400 dealers he represents face inventory issues, with several adopting some sort of online make-to-order system.