From the Mag: Reversing Course

The current state of the automotive restyling and car care markets is comparable to what feels like a rat race Olympics integrated with performance-enhancing drugs—you think you see signs of normalcy and stop to catch your breath, only to watch as the menacing rodent is given a steroid booster and you’re off and running again.

We’re still weathering the chip crisis—an inventory shortage thunderstorm that’s added snow pellets and large hail in the forms of soaring gas prices and plant shutdowns.

According to the March 16, 2022 Automotive News article, Ukraine war, chip shortage expected to trim global production by more than 5 million vehicles, S&P Global Mobility lowered its 2022 and 2023 estimates by 2.6 million vehicles each. The forecaster now expects auto companies to produce 81.6 million cars worldwide this year and 88.5 million next year.

Aftermarket shops across the country continue to experience the trickle-down effects from the chip shortage, but there seems to be a common denominator, with businesses experiencing more of the good than the bad in the current market.

Downtime Success?

The chip shortage means dealerships are carrying lower inventories, and experts don’t see a return to earlier levels anytime soon, if ever.

An article on motortrend.com, What Happened with the Semiconductor Chip Shortage—and How and When the Auto Industry will Emerge? states that the chip shortage crisis is improving but won’t be resolved overnight. The industry is holding its collective breath that things won’t backslide, and while shortages are projected to last into 2023 or longer—and may prove to be endemic—the hope is they will be more manageable as chipmakers increase capacity and automakers find ways to make cars with fewer chips or use more of the higher-tech wafers that are more plentiful.

On the heels of the pandemic, the chip shortage tested even the most prepared aftermarket businesses. Then came rising gas prices, earthquakes forcing plant shutdowns, and OEMs recognizing the economic benefits of lower inventory levels, and the challenges became even greater.

So why are many restylers reporting strong sales and growth?

Click here to read the full article in the July issue of THE SHOP.

A.J. Hecht

A.J. Hecht is the managing editor of THE SHOP and host of the In Gear with THE SHOP podcast. Have an idea, a tip, or a question you’d like to see answered? Contact A.J. at ahecht@cahabamedia.com.

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