Automakers have been stretched thin by pandemic-related absenteeism, distancing protocols, quarantines and supply-chain constraints. All this, combined with the two-month shutdown this spring to contain Covid-19, has made it difficult for factories to match the rebound in consumer demand for new vehicles driven by low interest rates and a shift toward private transportation.
Companies are trying to make up the difference even as virus cases surge to new records. Output is nearing pre-pandemic levels, but inventories are still thin. The number of all new cars and trucks available in the U.S. was almost one million units lower in October than a year earlier, according to researcher LMC Automotive.
Complaining about depleted supply is a common refrain from dealers, but Brown’s comments are a bit of a departure for lenders. Banks have spent years wagging their fingers at automakers for pushing out too many cars.
The lack of reliable inventory is helping to spur business at new players in the used-car space, such as Sonic Automotive Inc.’s EchoPark and Carvana Co., Brown warned.