DALLAS — Car shoppers are heading for a new round of sticker shock if the strike by the United Auto Workers doesn’t end soon, particularly for popular vehicles that are already in short supply.
Vehicles from the Detroit Three sat in inventory an average 52 days before being sold in August, up from 31 days at the start of last year, according to Edmunds data. While the supply of cars from Detroit’s Big Three will largely depend on how long the strike lasts and how quickly it spreads to other plants – there were rumors Friday that additional factories could be added next week – there are other factors.Garrett Nelson, an auto analyst for CFRA Research, expects manufacturers to eliminate incentives they pay to dealers to boost sales. Those incentives let dealers reduce their sticker prices, and they’re often targeted at slower-selling models.
Consumers who lease their vehicle and are coming to the end of the term could be especially vulnerable. Drury says leasing companies want their cars back while the used-car market is hot, and might be unwilling to extend the lease. Car prices were rising long before the auto workers even raised the possibility of a strike. A chip shortage, disruptions in the global supply chain and strong demand pushed prices higher.
“It’s almost a foregone conclusion that the UAW will succeed in getting substantial wage increases,” says Patrick Anderson, the founder of Anderson Economic Group, a research firm that conducts market analysis. “Part of that is simply due to inflation, part of that is due to the profits of the automakers, and part of that is due to the leverage that the UAW has right now with a short inventory and an economy that still has a lot of people that want to buy cars.