2020 – 2021 Inflection Point In American Automotive History

The past two years have seen a complete reset in America’s century old love affair with the automobile.

While the pandemic, supply chain disruptions and chip shortages have made it harder to buy vehicles, it has ushered in fundamental changes that are very good for the industry and ultimately consumers as manufacturers can more effectively manage market fluctuations.

The passing of the era of dealer lots bursting at the seams with vehicles ready for spontaneous sign and drive away purchases, may be permanent. Though painful now, it is much more efficient and should result in long term price stabilization.

Today the vehicle availability in America at any given time is down from 1.3 million to about 850,000 units. In the near term, scarcity and frenzied consumer bidding skirmishes have driven new car prices up 13% in just a year, and pre-owned vehicles wholesale prices up 5%.

In Europe and other parts of the world, the personal transportation sales model has always been a deferred gratification affair, where showrooms display a handful of new models and cars are built to order, for delivery in 6 weeks to several months.