The nation’s largest and longest auto show is underway at McCormick Place after being postponed last year due to COVID.
The 2022 Chicago Auto Show is featuring the latest automotive trends while showcasing an influx of vehicles at a time when new cars are hard to find.
Mike Colias, a reporter for The Wall Street Journal who covers the automotive industry, including General Motors and Ford Motor Company, says there has been a low volume of available vehicles due in part to an ongoing computer chip shortage.
“By spring of last year, it looked like we were going to see record sales and then all of a sudden we had rolling factory closures because car companies couldn’t get enough chips,” Colias said. “If you drive by any dealership you’re going to see barely any cars in their new car lot.”
Kevin Keefe, chairman of the Chicago Automobile Trade Association and dealer principal at Brilliance Honda and Brilliance Subaru, has witnessed this inventory shortage first hand while noting that demand has been high, creating the perfect storm.
“At my Honda lot, I normally carry 400 new cars on the ground and today I had three,” Keefe said. “We’re selling deep into our pipeline, everybody is … the cars as soon as they come in, they’re delivered … It’s very different, but we’re getting through it.”
Keefe says one of the frustrations has been the delays on arrival times for new cars.
The chip shortage has been easing throughout the past few months but varies by manufacturer, according to Colias.
“This thing all along has been very choppy,” Colias said. “One manufacturer might be doing fine, and another has some of their most important factories down. I think we’re going to have those kinds of disruptions play out through the rest of this year. A lot of the executives are saying in the second half of the year, they might be largely out of the woods on this chip problem.”
The chip shortage has led to a large backlog of people looking to purchase new cars, leading consumers to gravitate toward used cars. Keefe says this has led to a spike in used car and pre-owned car prices.
“Values have gone up 30-40% on the pre-owned side and we were all used to having a depreciating asset until last year,” Keefe said. “The good news is that as a consumer, your vehicle is now worth 30-40% more on a trade-in.”
Meanwhile, President Joe Biden has set a goal of making half of all new car sales be electric vehicles by 2030. Colias said this is the direction car companies are headed, but demand from customers could vary.
“There’s still range anxiety, charging concerns … prices are a little higher for these cars so we’re going to wait and see if there are buyers for all these new models coming out,” he said.
For Keefe, the auto show provides an opportunity to test-run an electric vehicle with two full test tracks.
“The curiosity is very high,” Keefe said. “For the majority of us, we haven’t driven one yet … A great place to do it is at the auto show. There’s about eight or nine electric vehicles with product specialists, tracks. The track is silent. It’s very different.”