Empty Lots: The Car Shortage in Loudoun

Written in November 2021.

Imagine this. The COVID-19 pandemic is finally starting to wane. You just got the call - you can go back to work again. But you have some doubts. Before the pandemic, you would always take the bus to get to your office. Is that still the best plan? No, probably not; no need to risk it. You don't own a car, but now might be the time to get one. You go down to the dealership, and, just your luck - they don't have any new cars in stock.

This scenario has become more likely as of late. A shortage of new cars has been making itself known to dealerships for the past six months. In Loudoun County, Virginia, the pressure is on. According to data collected by the Virginia Automobile Dealers Association, 437 new cars were registered in Loudoun in October. That's down from 862 in October of 2019 - a continuing decline from last year.

Jason Torchinsky, senior editor at Jalopnik and a ten-year veteran of automotive journalism, explained that the shortage is not a new phenomenon. "During the pandemic, everyone assumed demand was going to drop. And it did," he said over a Zoom call. But what was unexpected was the sudden spike in demand that would come at the beginning of this year.

When vaccines became available to the public and going to work became a reality again, around six months ago, demand for new cars spiked, and dealers didn't have the supply to meet it. A combination of already low supply and a new parts shortage has led to a major lack of new cars at dealerships in Loudoun.

Larry Smyth, from AutoNation Honda Dulles, was able to shed light on how Honda and its dealerships being affected. Before the pandemic, AutoNation Honda Dulles would have between 300 and 400 new cars in stock. As of mid-November 2021, according to Smyth, they only had 12, and anytime new stock arrives, it is sold almost instantly.

The past two years have not been easy for AutoNation Honda Dulles. They didn't get their share of new vehicles in October, and in a shortage like this, after staffing problems during the pandemic, business is not what it used to be. In October 2019, 131 new Hondas were registered in Loudon County. Last month, October 2021, 97 new Hondas were registered.

Melanie Fox, a salesperson at Jerry's Chevrolet Leesburg, was able to offer another company's perspective. She also noticed the shortage six months ago. "That's when it really started affecting us," she said over the phone. "We're getting bare minimum allocations, sometimes not getting certain models at all. We haven't had Trailblazers or Malibus in as long as I can remember."

Market prices have also been affected, thanks to high demand and low supply. With less new cars available, and more push to get used vehicles in the door, prices have gone up. Both Smyth and Fox referred to market prices - an extra cost on top of the normal value of the car.

To compensate for the lack of new cars, dealerships like AutoNation Honda Dulles and Jerry's Chevrolet Leesburg are working hard to get more and more used vehicles onto their lots. "We're reaching out to customers from three years prior, looking on Facebook Marketplace," Fox said on the matter. "We will do whatever we can to get you to sell your car."

To combat the parts shortage, some manufacturers have also started cutting features. According to Fox, so-called "fully loaded" Chevrolets, equipped with every optional extra, have been out of the question for a while, and soon, Chevrolet will stop fitting their cars with heated seats.

Torchinsky mentioned a similar phenomenon in Europe - apparently, French auto maker Peugeot has begun to replace digital gauge clusters and interfaces with analog dials. While Peugeot retrofits new cars with old equipment, American auto makers Ford and Chevrolet have entire lots full of cars only waiting for one part to be complete.

The reason this shortage is ongoing, and won't end for some time, comes down to one thing: a shortage of semiconductors, or, as they are more colloquially known, computer chips. At the core of modern technology, the computer chip has become responsible for more and more of a car's operations over the course of the past several years. But demand for chips went up, and the fabricators haven't been able to meet it all.

"Auto makers took back orders for chips from chip [fabricators], and demand for consumer electronics went up," Torchinsky explained. "Fabs got lots of orders for new computer hardware. Cars use older chips, and it's not that easy for fabs to retool for different chips."

And so, where does this leave Loudoun residents who may be in the market for a new car? To hear those in the industry say it, this is not the time to buy a car. Some in the auto industry are optimistic that things are getting better, but there is still far to go. In the meantime, auto makers are doing what they can to span the gap in the supply chain left by chip fabs by cutting options and even going back to older technology, but dealerships are still getting left behind.

Estimates on when the shortage will end vary widely - anywhere from as little as a few months to two years. Until that happens, it might be wiser to look at a costly repair than to spend even more money on a new car. "It might make more sense to buy a new engine than to get something entirely new," Torchinsky said. "But, if you're looking to buy, good luck. You're not going to get exactly what you want for your money."

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