The Detroit News
Sept. 11, 2022
Kalea Hall and Breana Noble
Detroit — When the North American International Auto Show kicks off this week, customers will have the chance to experience some of the hottest new vehicles — even if they’re hard to find on dealership lots.
Shortages of microchips and other parts have tightened dealer inventories. The advent of new electric vehicle models has prompted automakers to allow customers to reserve a vehicle months or more in advance. And buyers have had a tough go of getting a feel for some new vehicles if one wasn’t available at their local retailer.
So, the return of the Detroit auto show after a more than three-year hiatus with a reimagined focus on consumers comes with valuable timing, organizers say. They expect to have 30 brands represented on the 800,000-square-foot floor at the Huntington Place convention center that they hope will attract 300,000 to 500,000 consumers when the public portion opens Saturday. And they expect to see close to 2,000 journalists during the preview days starting Wednesday, which also is bringing such dignitaries as President Joe Biden to the show.
Although Detroit’s three automakers are making a big splash at their hometown show, several automakers passed on displays for NAIAS this year. Dealers, however, from inside and outside the sponsoring Detroit Auto Dealers Association are stepping up to bring in lineups to the show floor for consumers to check out the latest technology, design, and powertrain offerings.
“The industry worldwide is struggling with inventory and supply, and because we have this connection with our dealer association, we’re able to use our network to help supplement visibility for vehicles at the show,” said Thad Szott, president of the DADA.
“Just to find vehicles at dealer lots or in showrooms has been challenging, so to be able to go to a convention center like we have in downtown and be able to cross-shop 30-plus brands under one rooftop is going to be incredible for the consumer.”
Checking out what’s new will be crucial for customers who haven’t been in the market for a new vehicle in a while since automotive technology has advanced significantly even since 2019.
“Cars are a lot different today, and they’re gonna continue to change as we move towards electrification and autonomous technology,” said Jessica Caldwell, executive director of insights at Edmunds.com Inc., an auto information website.
“Your relationship with your vehicle is going to be different, so being able to see if you’re comfortable in that environment is probably more important than ever.”
Inventory Dilemma
Starting in early 2021, automakers slashed production at plants as they struggled to obtain semiconductors, which are used throughout vehicles to power everything from heated seats to infotainment systems. The production cuts on top of high demand further ate away at dealer lots already low from the pandemic shutdowns. Ordering a vehicle instead of buying off the lot became the new norm, and it’s expected to stay to some degree.
“I don’t think it’s going to be all vehicles and all brands, but it definitely feels like it’s going to play a bigger role than it has in the past,” Caldwell said.
“We’ve been in these inventory shortages for over a year, and while things are expected to get better, will they ever get back to the point where you can just walk the dealership lot and have multiple options for every vehicle?”
The expectation is there will be a “healthy medium” between higher levels of inventory seen before and the current situation, Caldwell said. Automaker executives have said inventory levels of the past will stay in the past.
Automakers are having fewer production disruptions as a result of the components shortages. Inventories are starting to improve, but still are scarce.
The U.S. new vehicle inventory was around 1.2 million units in August 2022, below levels of about 3.5 million in August 2019, according to data from Cox Automotive Inc. The inventory level is up 24% from last year with 235,000 more vehicles available as of the week of Aug. 22.
The lower inventory level has made it challenging to make sure new vehicles are available for the show floor, Karl Zimmermann, vice president of the DADA, said last week during a tour of the auto show floor.
“It’s a great advantage again that the show is owned by the dealers,” he said. “And so, we have our tentacles that we could reach out and work with the regions and work with dealers to get all the cars.
“Dealers are thrilled that we have the opportunity to showcase our products and have a centralized place where people can come and see the products and also to be engaged with them and be part of these activations and to experience Detroit and have people get excited about the industry that we love and the products that we sell.”
