Car dealer navigates inventory shortage
Vehicle sales in Bermuda were down by more than 20 per cent in August year over year, but it’s not a shortage of buyers that is the issue — it’s a shortage of cars.
The August Retail Sales Index report revealed that motor vehicle stores sales volume declined by 20.5 per cent. In value terms, sales were 19 per cent lower than the levels recorded in 2021.
Glen Smith, the managing director of Auto Solutions, said December and August are traditionally the slowest months for vehicle sales — but August was slower than normal owing to the supply-chain disruptions impacting the global auto industry.
Mr Smith said: “Our main issue is inventory.”
The biggest problem is a global shortage of micro chips. When the Covid-19 pandemic hit in 2020, employers worldwide scrambled to supply their work-from-home staff members with computers, phones and printers — and demand by electronics manufacturers for micro chips surged, resulting in shortages among auto manufacturers that continue to this day.
Russia’s invasion of Ukraine in February has also been disruptive as factories have closed and that has impacted the supply chain of micro chips and other vehicle components built in the country such as electronic harnesses.
Mr Smith said the micro chip shortage is affecting inventory “right across the board. It’s all of our brands”.
He said Hyundai was slated to build 50 Kona EV electric vehicles in November for delivery to Bermuda in January — but only managed to build one.
Mr Smith added that Auto Solutions has pre-sold 30 Honda hybrid vehicles, but to date has received only 15 of them. Another five are scheduled to arrive in March.
He said: “People are still coming in. We have a big shipment next week and the week after, and they are all pre-sold. People are buying.”
But Mr Smith warned: “If your car breaks down, I can sell you a vehicle but it might not be the colour or model that you want.
“We have inventory, but not the amount we’d like to have.”