There aren't enough new cars to meet consumer demand in US

Automakers have been stretched thin by pandemic-related absenteeism, distancing protocols, quarantines and supply-chain constraints.All this has made it difficult for factories to match the rebound in consumer demand for new vehicle.
By : Bloomberg
| Updated on: 09 Dec 2020, 17:42 PM
Aerial view of stationed rental cars parked amid the coronavirus pandemic. (Representational photo) (AFP)
Aerial view of stationed rental cars parked amid the coronavirus pandemic. (Representational photo) (AFP)
Aerial view of stationed rental cars parked amid the coronavirus pandemic. (Representational photo) (AFP)
Aerial view of stationed rental cars parked amid the coronavirus pandemic. (Representational photo)

Ally Financial Inc., the largest US auto lender, said carmakers should get busy.

There’s enough consumer demand for manufacturers to ramp-up output of new models but not enough supply, Chief Executive Officer Jeffrey Brown told investors at a conference on Tuesday.

“Factories have to get back to work," Brown said, noting he’s been in discussions with Rick Hendrick of Hendrick Automotive Group, of Hendrick Automotive Group, which has 95 dealership locations across the country.“When I talk to his stores directly, they tell me their biggest challenge is lack of new-car inventory. The factories aren’t producing enough."

Trending Cars

Find More Cars

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.

FOLLOW US:Stay Updated with latest content - Subscribe us on
FOLLOW US:Stay Updated with latest content - Subscribe us on

(Also read | Maruti says long, steady auto demand depends on economy, Covid-19 situation)

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 US 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.

First Published Date: 09 Dec 2020, 17:42 PM IST
Recommended For You
View All
NEXT ARTICLE BEGINS

Please provide your details to get Personalized Offers on

Choose city
+91 | Choose city
Choose city
Choose city
By clicking VIEW OFFERS you Agree to our Terms and Privacy Policy

Dear Name

Please verify your mobile number.

+91 | Choose city