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.
The number of vehicles on dealer lots will shrink the longer the walkout goes on. Dealers are likely to lose incentives that the manufacturers pay them to boost sales by cutting prices.Many analysts think it will take several weeks before dealer lots start to look a bit empty. Ford, General Motors and Stellantis built up inventories of vehicles ahead of Thursday night's strike, and the UAW decided to limit the walkout to just three plants - at least for now.
The UAW began striking at factories that make only a few vehicles - Ford Broncos and Rangers, Jeep Wranglers, Chevrolet mid-size pickups and GMC vans. Dealers have good inventories of those.If the strike isn't ended soon, however, there could be shortages of some makes and models -big sellers or vehicles that are already in short supply, such as Chevrolet Silverado and Tahoe, GMC Sierra and Ford F-Series pickups.
As cars from Ford, GM and Stellantis, the successor to Fiat Chrysler, become harder to find, there will be a ripple effect. Consumers who need a vehicle would likely turn to nonunion competitors like Toyota, Honda and Tesla, who would be able to charge them more. Anyone shopping for a new, used or leased car right now will also be hit by higher interest rates. The average rate for a new-car loan this week stood at 7.46%, and for a used car, it was 8.06%, according to Bankrate.
The average price for a new vehicle jumped from $39,919 in 2020 to $48,798 so far this year, according to Kelley Blue Book. Cheap cars have all but disappeared, and consumers are forced into ever-longer loans to limit their monthly payments. Prices for used cars rose sharply in 2021 and 2022, but have slipped slightly this year.
The UAW is asking for a 36% increase in wages over four years, plus other demands that would increase expenses for the companies. Ford, GM and Stellantis have countered with offers to boost wages by about half that amount.
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Read more »