Continued COVID-19 Impact on the Automotive Industry – A Perfect Storm

The COVID-19 pandemic has had a swift and almost catastrophic impact on local businesses and industries worldwide. However, this impact can be felt especially hard by the automotive industry.

In addition to the COVID-19-related closures that have brought the industry to its knees, additional unforeseen incidents, including Texas's winter storm, Japan's earthquake, and a microchip factory fire, have contributed to this unprecedented break in the automotive industry's supply chain.

What does this mean for your business?

You'll find that today auto manufacturers, dealerships, and fleet management companies (FMC) have scarce vehicle inventories as their stockpiles have been virtually depleted.

Auto manufacturers are struggling to produce vehicles and are having to make some extraordinarily difficult decisions. Some are suspending production lines, while others are cherry-picking limited models to produce. Others are devising creative workarounds, like delaying certain parts' installation until after a vehicle is built. Ford, General Motors, Nissan, Toyota, Honda, and Volvo are the latest batch of manufacturers to face the brunt of this global supply chain disruption.

The industry is taking aggressive steps to get back on its feet. Still, analysts suggest that continued shortages of critical auto parts like microchips (consumed by the electronics industry) and seat foam (polypropylene doubling in price), combined with limited shipping containers and jammed ports, could continue to impact both availability and price well into Q3 of 2021.

As a matter of fact, as of March 2021, for every 100 requests made for a vehicle, only five are being executed.

At BuyMax, we want to see our members flourish and succeed regardless of market challenges. That is why we have been keeping a close eye on the automotive industry and wanted to share this relevant behind-the-scenes information.

Moving forward, we are asking that our members work with our BuyMax Fleet Team on all vehicle needs so that we can mitigate issues as they arise. We have built deep partnerships with manufacturers, dealerships, and our FMC (Mike Albert Fleet Solutions); and have been implementing strategies to reduce the impact on our valued franchise owners.

While lead-times for vehicles will vary depending on your vehicle specifications, we will provide you with options to reduce any potential impact on your business. We will scour nationwide dealerships to source your vehicles on your behalf.

To begin a dialogue with our team, send us a message at fleet@4buymax.com, and one of our fleet team members will reach out to start the planning process step-by-step to address both your immediate and mid-term needs. For additional information on BuyMax’s Fleet Program, visit buymax.com/buymax-services/buymax-fleet.

For further information regarding the fleet shortage, visit wsj.com/articles/chip-shortage-strains-heavy-duty-truck-makers-11614814111.