Since early 2020, American consumers have had to come to terms with a new kind of normal. Products and services are not as plentiful as we’ve grown accustomed to. Covid-19 and the occasional freak weather patterns have wreaked havoc on a number of industries in many ways, especially in terms of shortages. The restaurant industry is struggling to hire viable and reliable employees. Grocery stores are out of products, specifically goods originating from meat-packing plants. And we all know how paper products like toilet paper were hard to come by for many months. Nearly all industries are having some growing pains adapting to the unavoidable changes taking place, including automobile manufacturers.
Madisonians have noticed the dearth of new vehicles for the past several months when they pass by Smart Toyota on Odana Road. What has been a car lot brimming with options for decades has suddenly become a sort of ghost town with only a handful or so of vehicles on the lot.
“It’s a very noticeable difference,” says Smart Toyota’s sales director Justin Jackson. “We normally have 400 or more new vehicles on the lot, but since mid-April 2021 we’ve seen a steady decline in the number of New Toyotas we have on the lot. Now we only have maybe 5 to 10 new vehicles physically at the store.”
Sales Director
Smart Toyota – Madison, WI
Jackson says the pandemic is partially to blame for the shortage because modern vehicles rely on computer chips which became scarce due to manufacturers reallocating them to industries other than automotive. Then, early in 2021 the issue in new vehicle manufacturing were winter storms that crippled Texas-based businesses that are critical in the manufacturing of foam for seats.
“If it’s not one thing it’s another,” says Jackson. “We’ve got the chips, but because of the power issues Texas faced in the Spring of 2021, we didn’t have enough foam padding for the seats, and today, as production ramps up, it’s supply chain and logistical issues.”
It’s Not All Doom and Gloom
Those looking to purchase a new vehicle seem to understand the slow-down in global manufacturing, Jackson says. Instead of getting upset they can’t drive off the lot with a vehicle they think is “good enough,” consumers are now more apt to customize and pre-order a vehicle specifically made to their specifications.
“It’s kind of cool how people have adapted,” says Jackson. “They might not get that prior sense of immediate gratification of new car ownership, but they get to experience something else: personalization.”
Jackson explains the process of pre-ordering has been well-received for a few reasons, one of which is the compassion the consumer feels about simple logistics as they relate to inventory issues in this day and age.
Vehicle Customization increases satisfaction
“They also really like the fact we can get them exactly what they want; from safety features and amenities, to color preference,” says Jackson. “And when their customized vehicle comes in – usually in about 45 days – they are over the moon when they see the Happy New Car Day sign bearing their name saying the car was made specifically for them. It takes ‘ownership’ to a whole new level.”
Custom Pre-Orders on the Rise
Jackson says about five percent of Smart’s new vehicle sales used to be custom ordered. Today the percentage has skyrocketed to about 50 percent of the dealership’s monthly new car sales. And, Jackson notes, when a consumer has all the customizable options at his or her disposal, no one opts for a base model in order to save a buck or two.
“Often times, though, it’s not options that are the most appealing aspect of pre-ordering,” says Jackson. “Instead, currently, there has been a surge in hybrid vehicle sales. And now in winter, AWD (all-wheel drive) vehicles will see a spike in popularity.”
If you know you are going to order a customized vehicle, Jackson says it might be best to do a little homework prior to meeting with a sales consultant.
“People take a lot of amenities for granted, but if you’re customizing, you should consider some of the following options,” he says.
Custom Pre-Order Checklist
- Entertainment & Communications: think about your stereo system. Do you still need a CD player? How about satellite radio capability? Hands-free phone control? A video system? Navigation?
- Comfort & Convenience: this includes upholstery, heated/cooled seats, power door locks, keyless entry, dual climate control, etc.
- Safety: the simple rule of thumb is the more you can install, the more secure you’ll feel. If you can, opt for dual air bags, anti-lock brakes, traction control, cruise control, and parking assist systems.
- Appearance: the most enjoyable aspect of customizing is picking out your paint, trim, and wheels.
- Performance: what do you need to get from point A to point B in your daily life? A larger engine? Sport suspension? 4-wheel drive? Automatic transmission or stick?
Jackson says while customers are not complaining right now about having to customize and then wait for their new ride, he anticipates their patience won’t last forever. However, he also doesn’t see new vehicle inventory returning to “normal” in the immediate future, and with customer satisfaction currently at such a high level he’s not overly anxious about it.
“At this point, we do not see ‘ground stock’ (vehicles physically on the lot) back to our previously average levels before the end of the year,” he says. “That could change, but we really don’t see it happening until late 2022.”
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