While the automotive market is in a slump globally, dealers in the States are concerned about the exact opposite thing. They are worried that they will soon run out of trucks to sell. Despite the pandemic outbreak, people still went shopping for automobiles, especially trucks (are trucks being considered as apocalypse vehicles?) Such was the demand that in April, truck sales surpassed the passenger vehicle sales. This has worried the dealerships because customers are placing orders for pickup trucks that are not in production at the moment. Now that’s a sticky wicket!
Sales During Pandemic: Good Or Bad For The Dealerships?
On one hand, you have one of the fastest-growing automotive markets like India which didn’t sell even a single vehicle in April, and then there are dealerships here that are worried about supply not being able to match the current demand.
The problem mainly revolves around trucks. In April, 186,000 trucks were sold, compared to 169,000 passenger cars. Yes, trucks outsold cars. This shift in the trend is turning into a problem for the dealers as they are slowly running out of the stock.
According to Automotive News, dealers are already running low on the stock this year compared to the inventory they generally have.
What’s The Solution?
To make sure there is no backlog, some reports suggest that the factories open immediately and work three shifts to build light-duty trucks. Even though people are suffering from unemployment and financial crisis, people are spending money on new vehicles. Some automakers have come up with unique solutions to make sure the sales don’t plunge to a huge extent.
Automakers offering zero-percent financing is not uncommon. However, CarsDirect reports (LINK) that GM is planning to offer interest-free financing on the 2020 GMC Canyon,Yukon, and Buick Regal}. Interestingly, the same is not applied to Canyon and Yukon’s twins, the Colorado, Tahoe, or Suburban.
Depending on your finance options, if you do the math, these costlier GMC products will work out cheaper than Chevy’s models. This move has turned out to be effective as customers are booking the models. On the flip side, they are even booking vehicles that are not in production currently, thus leading to delayed delivery and further stock issues, especially with trucks.
Conclusion
If factories don’t open up soon, this could become a rather big problem to deal with. Such schemes entice people to make purchases, but how long will it take the companies to fulfill the orders? Once the pandemic settles, the orders are going to increase and there will be an issue in the supply chain management.
What are your thoughts on this whole situation? Share them with us in the comments section below.