Seven ways to recover if you are feeling the chip shortage impact

Brantley Kendall

18 May 2022 2 years ago

Are you feeling the silicone drought affecting your used car dealership? You are not alone. The global chip shortage is impacting all industries worldwide. Car shipping companies are undoubtedly the best option.

Once the covid pandemic hit the world, it wreaked havoc on the commodity prices and supply chains. Whether it’s new car dealers or auto manufacturers, everyone is struggling to recover from the semiconductor chip shortage. A slow down in manufacturing also means fewer cars in the inventory.

Due to covid, many large automakers had to shut down their manufacturing units. At the same time, the others had to shift their production towards making more profitable units. 

Unfortunately, if you have a used car dealership, you will feel the impact too. Not as much as new car dealers will, but your inventory will feel the effect of chip shortage all the same. According to an analysis by Bain & Company, the bottlenecks in the supply chain are going to resolve either in late 2022 or early 2023.

So, what to do in the meanwhile to recover. After all, you can not sit idly while waiting for the chip shortage issue to resolve. 

Don’t let the chip shortage affect your used car dealership

You may have noticed that the number of used cars in your inventory is decreasing, and vehicles at auctions are becoming more expensive. New car dealers are also turning towards selling used cars so that you may face more competition than usual. 

Firstly don’t let these factors affect your used car dealership. Just keep in mind that the supply and demand might work in your favor. The used vehicle sales are already accelerating, with people waiting in long lines. Prices of used cars are also soaring compared to new vehicles. The imbalance in supply and demand means you have lower operating costs, and you can also benefit from keeping your prices high.

But you would have to take advantage of whatever options you have at the moment. So, here are seven ways that you can adopt to  recover your used car sales:

Additionally, most of these companies also will give door to door delivery. This takes away both the fear of exhaustion and reliability.

Stock up on your inventory

Losing sales can be a shock for any car dealership and more so if you are unable to find more cars to stock up your inventory. However, you can add value to your inventory by searching for used cars that people tend to buy the most. Pile up SUVs or any other sports utility cars that are trending nowadays. So, you can be better prepared to battle out slow trade-ins.

Purchase vehicles that need repairing

If you have a garage as part of your use car dealership, try to purchase vehicles that need repairs. You might get some good deals on cars that need a new engine or brakes. Also, you’ll be saving on costs by buying a non-functional vehicle rather than a functional one. Some vehicles might need a few repairs, and you can have a good profit on your hand with a bit of attention.

Due to rising vehicle prices, people are also holding on to their vehicles rather than replacing them. So, you can also generate service revenue if you are only repairing their cars. You can add another strategy to your repair service. Pick cars from your customer’s home, repair and drop it off again at their house. An added benefit of at-home service is more likely to make customers approach your garage service.

Repaired cars

Contact past customers

Before the chip shortage can sweep your car dealership down, you need to think about various strategies. You can contact your past customers. Some of them might feel a financial crunch and want to get out of a lease or wish to sell their current vehicles. In contrast, others would like to sell the cars they’ve bought from you. Even if they don’t sell their car, they may know someone who will.

Advertise for used cars

Sales and marketing can play a crucial role in steering customers towards products in shortage or promoting the available ones. Every business has a social media channel nowadays for marketing and advertising purposes. You will also have. Get a word out that you are on the lookout for used vehicles. Use your mailing list and social media channels to advertise. This is an excellent way to bring in more used cars and increase your sales. More people will be coming to check what’s available in your inventory, and they might buy if they like a vehicle enough.

Create partnerships

You can use the slower chip shortage recovery period in your favor. Work on your dealership marketing, and search for localized partnerships with other auto businesses. You can team up with a car wash, garage, or auto detailing service to boost your business.


Revamp your inventory

We understand that waiting for the chip shortage to be over is not the ideal solution. But if the chip shortage is not impacting your car dealership, you may hold out for a little longer. However, you can make some changes in the meanwhile.

You would already have some vehicles on your lot. But with a bit of makeover, your space could look more interesting to your potential customers. Clean the area and use potted plants to fill in spaces. Angle your vehicles in such a way that the space looks more full and attractive to your customers.

Summing Up

The global chip shortage might have disrupted sales of cars and shut down the manufacturing units, but hopefully, this issue will be resolved after some time. But new and used car dealerships will have to plan ahead and prepare solutions for recovery. If you are running a used car dealership with a few changes in your inventory and space, you can recover lost sales and increase your profit. You just need to advertise, contact past customers and purchase vehicles that need repairing or are in demand. Hopefully, with a little due diligence, you will be able to fight off the impact of chip shortage. Sakaem Logistics has successfully been able to identify this issue and has found a solution. Our quote calculator will be able to provide you the cost to ship a car.

Brantley Kendall