Data Point
Eyes Wide Open: New Study Shows Car Shoppers Expect Higher Prices, Low Inventory
Friday May 7, 2021
Article Highlights
- Recent research by Cox Automotive indicates consumers who are in-market for new vehicles are seeing it clearly as well.
- A vast majority of consumers surveyed are aware of the global microchip shortage and are expecting limited choice and higher transaction prices.
- The full report will be available in mid-May.
You’ve likely seen with your own eyes the havoc being wreaked in the auto industry by the global microchip shortage. Drive through Dearborn, Michigan, home of Ford Motor Company and the company’s Dearborn Truck Plant, and it’s hard to miss: New Ford F-150 pickup trucks – the best-selling vehicle in America – are packed into previously vacant parking lots, built but not complete for the lack of computer chips. The trucks are “in float,” as the industry says, and there are similar scenes near assembly plants across the county, in Mexico and Canada. Many plants are taking downtime to manage the glut of unfinished vehicles. The problem is visible at dealerships as well, where there is a noticeable lack of inventory. According to vAuto Available Inventory data, new-vehicle inventory is getting close to 40% below year-ago levels. The lots are thin out there, and it’s going to get worse before it gets better.
Recent research by Cox Automotive indicates consumers who are in-market for new vehicles are seeing it clearly as well. A vast majority of consumers surveyed are aware of the global microchip shortage and are expecting limited choice and higher transaction prices. Dealers are being transparent: “We’re short on inventory,” they say, which is Latin for “You’ll be paying full price, plus some.”
83%
of in-market shoppers expect to find a shortage of new-vehicle inventory
59%
of in-market shoppers expect less favorable deals/lower incentives
42%
of in-market shoppers would be willing to pay more than MSRP for a new vehicle
73%
of in-market shoppers expect to face higher prices
Here are four takeaways from Cox Automotive’s recent research, which was conducted during the final full week of April. In-market shoppers are consumers intending to purchase within a year.
- Consumers are aware of the current global chip shortage, and that the shortage is impacting the auto industry.
- 76% of in-market shoppers were familiar with the global microchip shortage.
- 83% of shoppers that were aware of the microchip shortage were also aware that it is directly impacting the new-vehicle market.
2. Consumers anticipate negative impacts on the automotive market as a result of the microchip shortage, expecting increased prices, inventory shortages and longer delivery times.
- 83% of in-market shoppers expect a shortage of new-vehicle inventory.
- 73% expect to face higher prices.
- 59% expect less favorable deals/lower incentives.
- 42% would be willing to pay more than MSRP for a new vehicle.
3. Despite expectations of low inventory and high prices, most in-market shoppers are NOT expecting to delay their purchase, nor will they shift their consideration to other segments.
- 63% of shoppers are staying in-market and on course; 37% of shoppers are planning to postpone their purchase.
- 81% of in-market shoppers are staying committed to their intended vehicle segment; 19% are willing to consider another vehicle category.
- 77% of new-vehicle intenders are staying focused on the new-vehicle market; 23% of new-vehicle intenders are considering a shift from new to used.
4. Among in-market shoppers now likely to postpone their purchase due to the chip shortage, more than 60% would delay their purchase by 3 to 12 months.
The full report will be available in mid-May. If you would like to learn more or speak to one of the experts from Cox Automotive, reach out to the Cox Automotive PR team.