The Associated Press reports that computer chip shortages as well as a lack of other automotive parts “continued to hobble” the US auto industry last year and contributed to an 8% drop in vehicle sales compared to 2021 — the lowest level in more than a decade .

Automakers reported earlier this month that they sold 13.9 million cars, trucks, SUVs and vans in 2022 while parts shortage limited factory output amid high demand for new vehicles. It was the lowest sales number since 2011 when the economy was recovering from the Great Recession.

Repairer Driven News asked several OEMs how they’re handling parts shortages and supply chain disruptions. Hyundai, Honda, General Motors, Toyota, Nissan, and Mercedes-Benz responded.

Hyundai said specific to supply parts for Hyundai After-Sales, the company is working with Mobis Korea and Glovis to improve the stability of inbound supply and transportation from overseas through the expansion of carrier bases and ports of entry. They’ve also created an expedited sea freight option for bulky product to reduce lead times through the West Coast.

Other changes include:

    • “Enhanced systems integration with suppliers improving inbound supply visibility and customer ETAs;
    • “Enhanced supply lead time management at part level to improve inventory position for challenged parts;
    • “Improvements to proactive air freight policy avoiding inventory shortages and customer backorders;
    • “Expansion of supplier base for certain fast-moving parts as well as intensive supplier management for key suppliers in the USA and Asia focused on capacity management;
    • “Expansion of two-tier distribution network reducing inbound supply complexity, optimizing inventory, and improving facing fill rates; and
    • “Launch of Florida Parts Distribution Center moving supply point for Florida Dealers from Atlanta in order to improve service levels.”

Honda said it is “working with our vendors and suppliers to ensure that we can secure the parts our customers need to service or repair their vehicles.”

“As with the rest of the auto industry, Honda is not immune to supply chain issues impacting parts availability. We recommend any customer who is having difficulty getting Honda Genuine Parts for their vehicle to contact either their local authorized Honda dealer or our customer service team who will explore available assistance options.”

General Motors North American Business Communications Director Sabin Blake noted a gradual improvement in the supply chain, including with semiconductor availability throughout 2022.

“In fact, we recently reported another quarter of improved sales that contributed to a 3% annual improvement in total sales for the year,” he said. “Our strategy was for our teams to remain disciplined, adjust quickly when and where it needs to, and prioritize our customers first. We will stick to this strategy as we enter 2023 and continue to build long-term resilience.”

When asked if GM had had to leave certain features and/or parts off of its vehicles with the option for them to be added later, the OEM said, “The situation remains very fluid. While we do occasionally encounter some occurrences of disruption, they are generally smaller in scope and shorter in duration.”

Toyota said its North American plants “continue to face intermittent production delays due to many supply chain disruptions, and we anticipate challenges into Q1 of 2023.” They noted that they don’t expect delays to impact employment and repairs on certain vehicles “may take longer than expected due to lack of certain parts/components.”

“However, Toyota and Lexus dealers are doing their best to accommodate guests’ needs,” said Toyota spokesperson Victor Vanov.

As far as manufacturing, Toyota’s customer demand is outpacing supply.

“Essentially, once a vehicle is assembled and leaves our plants, it’s already sold to a customer,” Vanov said. “If we had more vehicles to sell, they would have been in the customer’s hands.

“We want our customers to know that our dealers will work to get them the vehicles they need. Our inventory continues to improve and we have teams working around the clock to get vehicles to our customers as quickly as possible. We are assembling vehicles as a whole, meaning, we will not leave off features and/or parts and add them later. In other words, we won’t build them and leave them sitting in a parking lot and retrofit them. It just depends on a number of factors. For example, some vehicles may share the same part/component, however, we’ll prioritize vehicles that are in higher demand. We believe it’s important to deliver vehicles to our customers that are not only high in quality but complete.”

Toyota finished the year with just under 24,000 vehicles on their brand dealer lots nationwide, according to the AP. While that’s up from about 19,000 at the end of 2021, it’s still short of the usual 300,000 on lots before the pandemic.

Nissan said the company “continues to work closely with our supplier partners to assess the impact of supply chain issues and minimize disruption for vehicle deliveries to our dealers and customers.” The OEM is also prioritizing the production of core models in its lineup.

Mercedes-Benz said it has been able to manage supply chain risks caused by COVID-19 through increased transparency and adapting its network to current market requirements by shifting production capacities between plants. Both strategies have helped the OEM work around parts shortages.

“We are going into even more intensive coordination with our direct suppliers on production planning in order to make the system more robust for the future,” spokesperson Pia Droldner said. “In addition to capacity assurance, we are working with our suppliers to further develop the technology to further increase the overall transparency of the supply chain. Measures include, for example, more concrete agreements on delivery acceptances, extended planning cycles as well as the establishment of safety stocks at different points in the supply chain and multiple sources of supply.”

Mercedes also focuses on producing its passenger cars in its largest sales market with locally sourced parts, materials and raw materials.

The AP reports that sales were up slightly in Q4 2022 and inventories grew as parts supply “improved enough to increase production a little.”

Analysts now expect sales to grow by roughly 1 million to around 14.8 million this year as demand remains strong but they’ll still be far short of the normal 17 million per year before the pandemic, according to the AP.

With many models still in short supply, though, the average new vehicle price rose 2.5% in December to a record of just over $46,000, according to JD Power. Electric vehicle sales hit more than 807,000 last year, up almost 65% from 2021, the AP reports, while pickups and SUVs were 77.3% of sales and cars dropped to 22.7%.

On the auto body shop side of the parts shortages and supply chain issue, Berkshire County, Massachusetts shops, for example, report they are still struggling to get parts, according to Spectrum News 1.

As car owners in the area wait for their vehicles and others struggle to make new appointments, John Bilotta said the problem stems from the availability of shops and parts.

“We have very poor availability of body shops and repair shops in the area,” Bilotta said, “People are just closing up. And then getting a hold of these parts, it’s crazy.”

Bilotta said customers of basically every make and model should be prepared to wait if their car needs work these days.

The Seattle Times reported earlier this month that the parts shortages have pushed body shops to get creative in how they complete repairs.

Dave Hebert, manager of Berkley Collision in Berkley, Michigan, told the newspaper he has had to move away from relying solely on new parts and has turned to rebuilt and remanufactured parts at times to fix people’s vehicles faster. However, repairers should note that can mean going against OEM repair procedure guidelines since some OEMs call specifically for new parts for certain damages.

Prior to her retirement at the end of December, CCC Intelligent Solutions Industry Analytics Senior Director Susanna Gotsch told RDN that if the US experiences a recession, “vehicle sales will likely decline or stay flat, and new and used vehicle prices may soften further. However, supplies of new and used vehicles remain below pre-pandemic levels, so declining demand will likely have only a marginal impact on pricing.”

Also throughout 2023, Mark Fincher, CCC’s market solutions vice president, shared in a report published in November that parts and material shortages from supply chain disruptions will continue as well as staffing challenges, the need for new training and tooling to repair increasingly complex vehicles, pressure from consumers for more digital experiences, and consolidation across the industry “as demand for capital investment for training and equipment growth.”


Featured image credit: ProfessionalStudioImages/iStock

Share This: