Nearly 50% of car shoppers in the United States are leaving the market and delaying their purchase for the next several months due in large part to the impacts of the global microchip shortage on inventory and vehicle pricing, according to Kelley Blue Book’s latest survey (from late August 2021).
“The latest Kelley Blue Book research indicates that most consumers anticipate negative impacts on the automotive market due to the chip shortage, from increased prices to inventory shortages and longer delivery times,” said Vanessa Ton, Senior Industry Intelligence Manager for Kelley Blue Book.
Ton said a large portion of the in-market population now say they plan to delay their purchase given the current market conditions, and that “it will be interesting to see how that could impact the ongoing delicate balance of supply, demand and pricing across the industry.”
Long term, she said, OEMs are likely experimenting with “made-to-order” deliveries for consumers.
For in-market car shoppers, KBB said 48% are likely to postpone their purchase due to the chip shortage; and of this group, most plan to wait at least several months: 40% said seven months or longer, another 40% said three-to-six months, and 12% said one-to-two months.
As for consumers who do not plan to postpone, there is an understanding that they may need to make some changes to their plans so that they can buy a vehicle sooner than later. Within this group of potential buyers, 25% said they would consider switching brands, 19% would consider changing vehicle categories, and 18% would consider changing their intended purchasing from new to used.
A little more than a third of all surveyed in-market car shoppers (35%) say they are willing to pay above MSRP—up to a 13% premium or roughly $5,600 more, based on the latest Kelley Blue Book Average Transaction Prices (according to KBB).
Furthermore, three-quarters of consumers are willing to drive outside their local area for a vehicle: most are willing to drive between 50-200 miles (around 80-321 kilometres); and fewer than 20% will drive more than 200 miles.
“In addition, many shoppers say they are willing to make some changes to their vehicle purchase plans due to the chip shortage,” said KBB. “Among all in-market shoppers surveyed, 35% said they would shift from an import to domestic brand, 32% said they would switch brands they are considering, and 31% said they would shift vehicle categories.
Another 38% said they would shift from potentially buying a new vehicle to instead buying a used vehicle, but only 18% said they would consider shifting from buying used to new.
“In general, overall awareness of the chip shortage among car shoppers is high,” said KBB. “More than half of shoppers (58%) are aware of the cause of the shortage, and 71% are familiar with the effects of the shortage on the automotive market.”
Ninety per cent are aware of the new vehicle inventory shortage issue that dealerships are struggling with, and they understand this is impacting the car-buying experience: 84% think the vehicle with their desired options/specs will take longer, 83% think the vehicle category they want will take longer, 69% think prices will increase, and 61% think there will be less favourable deals/incentives offered.
Consumers also understand that the issue is spread across the entire automotive industry, with 79% saying the inventory shortage impacts both domestic and import vehicle brands, and 76% saying all brands will be impacted. Seventy-one per cent said all vehicle categories are impacted.
Source: Cox Automotive: Microchip Shortage Wave 2 Infographic
