THE STATE OF OUR LOCAL AUTO INDUSTRY COMPUTER CHIP SHORTAGES, INVENTORY WOES, SUPPLY CHAIN ISSUES AND RISING GAS PRICES HAVE CREATED A CHALLENGE FOR CONSUMERS AND BUSINESS ALIKE BY SHANE SNIDER | PHOTOGRAPHY BY JOHN MICHAEL SIMPSON merica’s love affair with cars all but ended when COVID-19 began its global assault in late 2019. In 2020, the auto industry suffered more than $100 billion in lost sales as the public slammed the brakes on its daily commute activities in favor of remote work. By 2022, people started to realize there would be no quick jump-start – supply chain disruptions effectively strangled delivery of the computer chips that serve as the brains of our modern vehicles. Locally, a quick trip to the nearest car lot is an instructive experience. You’ll have to pay top dollar (or more) for a new car, and a lack of inventory means you’ll be waiting months for your new ride. Used car lots are just as treacherous to navigate. You’ll get top dollar for that trade-in, but you’ll pay more for your next vehicle regardless. For local dealers like Johnson Automotive, the pandemic upended a business model that had worked just fine for decades. “We’ve had to shift from that mentality of, ‘What will it take to earn your business today?’ to ‘How do we slow down and think from a longer-
term perspective?’” said Erick Kirks, marketing director at Johnson Automotive. “We’ve had to shift our sales skills from being closers to becoming relationship builders.” It’s not as if the auto industry has never been through a seismic shift. The Great Depression wiped out legions of car manufacturers, and by the 1950s, the car producers had consolidated into the “Big Three”: Detroit’s General Motors, Ford and Chrysler. After the high gas prices of the ’70s, smaller imports from Asia and Europe started crashing the U.S. auto scene. It may seem like a distant memory, but General Motors and Chrysler filed for bankruptcy in 2009 and had to be bailed out by the federal government. The history of the automobile industry is a rollercoaster ride with steep drops and sudden climbs. “We’ve had everything from a war, earthquakes, tsunamis … one thing after another creating problems for our industry,” Kirks said.
ON-DEMAND GOES VIRAL For Durham businesses, the impacts of the pandemic have brought an unusual mix of highs and lows. Durham-based Spiffy is a provider of on-demand car wash, detailing and oil change
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services. Chief Marketing Officer Grayson Leverenz said the company saw a huge shift in its business – on-demand services boomed in the beginning of the pandemic as locked down consumers looked for ways to bring services to their doorstep. And that appetite for convenience has carried through even as pandemic concerns begin to ease up. “We’re seeing inflation at a 40-year high and record gas prices, and that impacts our customers,” she said. “People are having a hard time getting their hands on new cars because not as many are being built because of supply chain problems. People are hanging on to their cars longer and buying used
Customer Tony Fiore listens as Senior Client Advisor Shahab Sheibani explains the features of the all-electric 2022 BMW i4 M50 (also shown below) in the showroom of Hendrick’s BMW of Southpoint.