Chinese expansion and unprecedented arrogance of dealers

Demand has surpassed supply

The main trend, which, judging by the statements of automakers, they are very happy with: "Demand has surpassed supply." And there are several reasons for this at once, the main of which is the coronavirus pandemic and the quarantine restrictions associated with it. When a huge number of car assembly plants suspended their activities during the general lockdown, top managers of auto companies decided that the restrictions were set for a long time.

The states of workers were “optimized”, and the purchases of components decreased. However, when the restrictions were lifted, it turned out that people, as before, want to buy cars, and in the same volumes. And if it was possible to return the employees of manufacturing industries and restore the production of mechanical components, then everything turned out to be more difficult with microchips. The released volumes of semiconductor production were contracted by manufacturers of consumer electronics and computer equipment, Chinese automakers and Tesla (for instance, VIN decoder); in addition, delivering chips from Southeast Asia, where their lion's share is produced, to Europe and the United States turned out to be problematic due to the notorious logistical crisis. As a result, there is a global shortage of microchips for the automotive industry.

Prices are out of touch with reality

The second trend: "Prices are out of touch with reality." On the one hand, one can complain that the reasons for this trend lie, as in the first case, in the semiconductor crisis. However, the crisis is all over the world, and inadequate prices are only in some parts of it. There is only one reason: the greed of dealers. For example: in the US, official dealers also decided to “warm up” on situations with a shortage of cars, but the largest margin that sellers allow themselves for the most popular models on the market is 20% (read more here VIN lookup).

Chinese expansion

The third trend: "Chinese expansion". Despite the fact that the “Chinese” have been offering our consumers quite decent cars for several years now, which have nothing in common with cars of previous generations, such as Chery Amulet or Geely MK, only this year they began to show three-digit growth dynamics. A number of factors contribute to growth: the constant renewal of the model range, a wide selection of cars of various classes, as well as still more affordable prices compared to models of still more popular brands.

And, of course, the already mentioned dealer impudence has become an important factor. Realizing that their cars have few real advantages over long-term bestsellers, the dealers of the “Chinese” practically do not “get rich” on the rush demand. Naturally, there are also negative examples, but in most salons they will be able to offer the buyer a car without extra charges (or with minimal "additional bonuses"), if not out of stock, then with a short waiting period.

Sources: Autostat, VIN check