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COVID-19 changes car buying in the short and long term

Lower Inventory, Robust Demand, New Sales Experience
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Posted at 5:30 AM, Apr 26, 2021
and last updated 2021-04-26 07:37:00-04

GLENDALE — There are great deals to be had on a new car or truck right now. That is, if you can find one.

It’s one of many impacts COVID has had on the industry that is emerging from the pandemic with some temporary concerns, and many permanent differences. Like so many things post-COVID, buying a new car is forever changed.

The global shortage of computer chips is slowing production of new vehicles. A recent report by CNBC estimates a $60 billion revenue hit to the international industry. Auto makers can produce the vehicles. They just can’t make the tech work without the chips, and the lack of inventory is beginning to show at local dealerships.

“I’ve got one Cadillac dealer with seven cars on the lot,” said Jim Tolkan, President of Automobile Dealers Association of Mega Milwaukee. Some dealers, and some brands have more cars than others. Heiser Automotive Group has five locations in Southeast Wisconsin.

“Nobody has as many cars as they would like on their lots,” admitted Heiser CEO Mary Ann Scaffidi.

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The computer chip and inventory issue is temporary, with signs already it’s beginning to loosen, but Scaffidi acknowledged many things about the car buying experience have changed in the last year, and those changes are staying. “It pushed everybody into computers and online. It was an overnight,” Scaffidi recalled. “We saw that happening right off the bat. We switched our processes immediately to make it work.”

Customers were already moving in a digital direction, and like with many other businesses, COVID accelerated that move dramatically. Customers can now have the dealers bring a vehicle to them for a test drive, and some even skip that step altogether.

“They do all their research online, and they jump in,” Scaffidi said.

To give greater confidence to those types of buyers, Scaffidi announced a new Heiser initiative that will allow customers to exchange the car for another within three days of purchase.

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And the stigma of the classic high pressure sales environment is changing too. “I believe the traditional sales person is becoming more of a brand consultant,” Scaffidi explained. “Somebody that's going to show you the features of the vehicle, which is going to help because then you don’t have that whole sales person back and forth, back and forth.”

You can still negotiate on price and options, but in many cases that’s taking place on the phone or online. Of course, if you want to kick the tires and haggle with a sales rep, you’re still welcome inside.

AUTO SHOW IS A GO

Meanwhile, the Greater Milwaukee International Car and Truck show is coming up next month.

Reimagined for COVID, the show is in a new location at Wisconsin State Fair Park. It’s shorter, it’s later, but it’s happening.

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“I think people are anxious to have someplace to go that will be safe,” ADAMM’s Jim Tolkan predicted. “We're confident with all the covid mitigation steps being taken, it will be a safe environment.”

The Auto Show will run May 5 through May 9 at State Fair’s Expo Center. There will be outside elements as well to further facilitate social distancing. Tolkan recalls the 2020 show being one of the last major events in Milwaukee before the pandemic shut down.

“Our 2020 show ended like the first day in March and within two weeks the economy was shut down,” he remembered. “With a lot of effort and good luck in the State of Wisconsin, we’re able to have a car show this year.”

This year there is no charity gala, an Auto Show tradition that benefits a local non profit on the eve of the show’s open. Instead, an ongoing raffle and silent auction for the run of the show will benefit ADAMM’s charity of choice for the event, Special Olympics Wisconsin.

Tolkan expects to return to the traditional February show at the Wisconsin Center next year.

For more information on this year's auto show : www.autoshowmilwaukee.com

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