The nation’s largest and longest running auto show is underway at McCormick Place after being postponed last year due to COVID.
the 2022 Chicago Auto Show showcases the latest automotive trends while showcasing an influx of vehicles at a time when new cars are hard to come by.
Mike Colias, Wall Street Journal reporter which covers the automotive industry, including General Motors and Ford Motor Company, says there has been a low volume of vehicles available in part due to an ongoing shortage of computer chips.
“In the spring of last year, it looked like we were going to see record sales, and then all of a sudden we had plant shutdowns because automakers couldn’t get enough chips,” Colias said. “If you walk past any dealership, you will hardly see any cars in their new car park.”
Kevin Keefe, President of Chicago Auto Trade Association and main dealer at Brilliance Honda and Brilliance Subaru, witnessed this inventory shortage firsthand while noting that demand has been high, creating the perfect storm.
“At my Honda lot I normally haul 400 new cars on the ground and today I had three,” Keefe said. “We’re selling deep in our pipeline, everybody’s…cars as soon as they come in, they’re delivered…It’s very different, but we’re getting by.”
Keefe says one of the frustrations has been delays in arrival times for new cars.
The chip shortage has eased in recent months but varies by manufacturer, according to Colias.
“This thing has always been very choppy,” Colias said. “One manufacturer might be doing well, and another has some of its most important factories shut down. I think we are going to have these kinds of disturbances throughout the year. Many executives say that in the second half, they could be largely off the hook on this chip issue.
The chip shortage has resulted in a large backlog of people looking to buy new cars, leading consumers to turn to used cars. Keefe says this has led to a spike in used car and second-hand car prices.
“Values went up 30-40% on the used side and we were all used to having a depreciating asset until last year,” Keefe said. “The good news is that as a consumer, your vehicle is now worth 30-40% more on a trade-in.”
Meanwhile, President Joe Biden has set a goal of making half of all new car sales will be electric vehicles by 2030. Colias said that’s the direction automakers are heading, but customer demand could vary.
“There’s still range anxiety, pricing issues…the prices are a bit higher for these cars, so we’ll wait and see if there are buyers for all these new models coming out,” he said.
For Keefe, the auto show provides an opportunity to test an electric vehicle with two full test tracks.
“Curiosity is very high,” Keefe said. “For the majority of us, we haven’t driven one yet… A good place to do that is at the auto show. There are about eight or nine electric vehicles with product specialists, caterpillars. The track is silent. It’s very different.”