Local Dealers Feel Pinch From Auto Inventory Shortage
Cutshaw Discusses Navigating New Challenge
By Jason Jones
Messenger Reporter
GRAPELAND – Driving through any town in Texas, or even nationwide, locals have noticed automobile dealership lots with largely unoccupied space. While not quite as noticeable in large markets, the scene at smaller dealerships is quite stark. Naturally, the first thing that comes to mind is “I wonder if they are gearing down to shut the doors…”
“I hear that a lot” said Michael Cutshaw, owner and General Manager of Cutshaw Chevrolet in Grapeland.
Rest assured; they are not. Dealerships across the country are navigating new waters as they learn how to accommodate their customers with a shortage of inventory.
Cutshaw was recently gracious enough to visit with the Messenger to help the public understand why the automobile dealership landscape looks so different.
“A quick overview is it’s a semiconductor shortage, which, like everything else, was caused by COVID,” said Cutshaw. “It’s a little bit of a self-inflicted wound by the auto manufacturers, because when COVID hit last year, they basically thought that car sales were going to plummet. So they all kind of retreated and cancelled contracts for semiconductors or reduced their contracts for semiconductors – which run about 6 months to a year out – so when car sales didn’t slow down, and when car sales through COVID were very busy, they ran out of semiconductors.”
“Production didn’t slow down, production actually increased” Cutshaw continued. “And it’s not just that the car manufacturers cancelled their contracts, it’s that the home appliance, home computer industry, the telephone industry increased their contracts, so all the production that the car companies gave up on semiconductors went to all these other home electronics.”
When asked whether the new inventory shortage has affected his access to used inventory, Cutshaw replied “Oh, absolutely. It has made it much more difficult to find used vehicles. The benefit to it for customers is that used vehicle prices are crazy right now. If you’ve got a vehicle you want to sell or a vehicle you want to trade in, this is a great time to do it. The trick is finding something to buy. If you can, it’s a great time to trade.”
While lot inventory is almost non-existent, business is still moving forward as usual.
“You know, the lot looks horrible, but we are getting in between 5 to 10 new vehicles a week,” Cutshaw said. “We’re getting transport trucks, but you can look at our inbound list; Every vehicle coming in has a name by it. New vehicles never make it to the lot. They go to make ready and then they’re gone. We really can’t complain. It would just be nice to have some stuff on the lot.”
Regarding the subject of special ordering vehicles for customers, Cutshaw had this to say: “We can still place an order for a customer. A lot of times what we have to do, we have to place an order. We’ll sit down with a customer and find out what they’re looking for, then we tell them what they can have. We’ll try to get as close as we can.”
“Right now, they are eliminating a lot of packages that require a lot of semiconductors. So like on an LT package truck, we can’t get leather seats, we can’t get heated seats on an LT package. They’re just allowing cloth,” he said.
Cutshaw went on to say, “On the 5.3 liters, they’ve gotten rid of the Displacement on Demand where it shuts down cylinders, because the system that shuts down the cylinders requires about six semiconductors. The automatic stop feature on our trucks, where you come to a stop and the engine turns off, when you take your foot off the brake pedal it starts back up again, they’ve eliminated that from our trucks. That apparently takes a couple of semiconductors to run that system,” Cutshaw said.
“So they’ve taken a lot of these systems that aren’t critical to the truck and removed them, taken them off, so they can conserve semiconductors for more trucks and more vehicles,” he added.
Cutshaw explained that relief is on the way. New contract negotiations and new scheduling should help dealerships replenish their inventory in due time. Until then, creativity is the name of the game while finding ways to accommodate customers. The picture looks a little different, both for automobile dealers as well as consumers, but the gears keep turning.
While local dealerships, like Cutshaw Chevrolet, must navigate a new set of challenges and circumstances in order to serve their customers, they are more than willing to do so. Browsing the lot may be difficult these days but given a little flexibility and a measure of patience, the time may be just right for a trade.
Jason Jones may be reached via email at [email protected]
