Now that the United Auto Workers union has started a strike, the US auto market is about to be thrown into turmoil all over again.
Auto sales hadn’t entirely recovered from the pandemic, but car shopping in the United States could change once more.
Dealerships will stay open
You will still be able to shop for cars, even at Ford, GM and Stellantis dealers. They’re not going to shut down, as car dealerships are independent franchises that aren’t owned by the company whose logo is on the building.
What’s more, they will still have cars to sell for a while. Most of those dealers have vehicles on hand to sell for a few weeks yet, and the current strike plans will initially impact only some of their product lines, said Jonathan Smoke, chief economist for Cox Automotive. The strike’s impact will be nothing like the Covid pandemic and the computer chip shortages that largely shut down the entire US auto industry in recent years, he said.
Besides, new car dealers also sell used cars and, even if the flow of new cars suddenly stops entirely, they will continue to do so. They also service cars, and their service operations will continue, as well, although parts supplies could be hampered.
The auto manufacturing crises of recent years have left auto dealers better prepared to deal with disruptions, said Scott Kunes, chief operating officer of Kunes Auto and RV Group, which owns more than 40 dealerships in the Midwest.
“We already started to take some action a few weeks ago, when it looked like the strike was pretty imminent,” Kunes said. “We started to stock up on used vehicle inventory, especially in the domestic makes, and some of the hotter models.”
His dealers also took steps get more new vehicles onto their lots.
Vehicles could get more expensive
Not all automakers are facing a strike right now. Not even most of them. Toyota, BMW, Hyundai, Nissan, Tesla, Volvo and Subaru, just to name some, are still producing cars, trucks and SUVs in the United States, and their workers are not unionized.
But dealerships for the Japanese and South Korean automakers have always tended to have less vehicle inventory on-hand than those for the Michigan-based automakers, Kunes said. Ultimately, this could translate to pricing pressure as domestic automaker inventories start to run low and their competitors may not have the vehicles ready to pick up the demand.
For now, at least, the strikes are confined to factories making only a few specific models. If the strike drags on a long time, said Tyson Jominy, an industry analyst with JD Power, prices will start to rise again. They probably won’t reach the levels reached during the computer chip shortages but, in the worst case, it could come close.