Car lots of turnover: 4WD, AWD in high demand in Glenwood Springs
It’s a seller’s market in the used vehicle industry.
Vehicle dealerships in Glenwood Springs are experiencing lower new and used vehicle inventories due to supplier production delays caused by the COVID-19 pandemic.
Don Gerbaz, general manager at Berthod Motors Inc., said the ripples from last year’s delays keep on going.
“When we first went into quarantine and restricted sales, obviously we had manufacturers that shut down production for two months. It’s (a sixth) of our year,” Gerbaz said. “Sales probably at first dropped off. But a lot of people had more of a need for personal cars. It depleted the supplies.”
Gerbaz said last summer the supply of new cars decreased, but the demand did not, resulting in a demand for used cars.
The value of a used vehicle, barring massive changes in mileage, was appreciated, Gerbaz said.
“That just doesn’t happen,” he added.
Despite vehicle manufacturers resuming production, the inventory on dealership lots couldn’t catch up with demand.
That supply and demand was imbalanced even more when the Japanese factory that makes a sixth of the world’s high-tech components for automobiles, mobile phones, tablets and gaming consoles was severely damaged by a fire in September.
Renesas chip factory in Tokyo is planning to restart production by April 19, though the company has stated pre-fire chip production levels aren’t expected for another two months.
Gerbaz said the demand for new computers, phones and other types of technology increased as people spent more time at home during the pandemic.
“We keep hearing that chip supplies will be coming back and it’s getting worse,” Gerbaz said.
“That’s what gets us to where we are today. Supplies of new cars were tight before, and all the new car manufacturers are reducing production or stopping production at plants for a week at a time.”
Gerbaz said some car manufacturers are producing vehicles without the necessary components.
“The next expectation is used cars are going to wind up going up in price. There’s almost no other way than prices going up throughout the summer,” Gerbaz said.
“Cross over, sports utilities and trucks — those are the highest in demand.”
Gerbaz surmised that those manufacturing shortages won’t just impact the vehicle industry.
“Eventually, everyone gets into it because somewhere along their supply chain there will be a shortage,” Gerbaz said. “It looks random, but it ain’t random.”
Mark Barton, general manager of Phil Long Ford Dealership, had the foresight to purchase additional inventory last year in anticipation of limited supply.
“So, new cars right now are sitting OK, but as the summer months tick by, the right color combination or right trim colors might not be readily available,” Barton said.
“There’s always been a demand for four-wheel drive. The new car prices aren’t any higher than they normally are, but used car prices have gone up considerably, which works to the customer’s trade-in advantage considerably.”
Barton said the service department isn’t feeling any supply shortages for parts, which are primarily purchased from manufacturers in the United States.
The database for used vehicles with all-wheel drive or four-wheel drive used to contain thousands of vehicle options when Barton would conduct a vehicle search before the pandemic.
Yet on March 29, Barton’s search for Toyota dealer options for models five years old or newer that featured AWD or 4WD returned just 18 results
“All the dealers are looking, which drives the prices up,” Barton said.
Reporter Shannon Marvel can be reached at 605-350-8355 or firstname.lastname@example.org.