Navigating the Post-Pandemic Auto Parts Challenge: What You Need to Know

The post-pandemic period has proven to be an extremely challenging time in the auto repair industry. Virtually all manufacturers have been dealing with random parts issues caused by a number of convergent factors that have created the perfect storm.

You may have experienced delays in getting a repair completed, are currently facing a delay, or know someone who has been impacted. While this post may not provide the answer you’re looking for, our goal is to highlight some of the key contributing factors and offer a few suggestions that might help.

It may seem odd that these issues are popping up now, a couple of years after the worst of the pandemic. The reality is that for every automotive component, there were a certain number of replacement parts available on warehouse shelves, and we are hitting the time when some of those have been exhausted. Some of those parts were manufactured at sites that are no longer in operation.

While there is an effort to get most of these manufacturing sites back up and running, there is no one answer for every situation. Here at Karl Chevrolet, we stock THOUSANDS of repair and maintenance parts; but it is impossible to have every possible part we might need!

Key Factors Contributing to the Shortage

1. Supply Chain Disruptions

   • The global supply chain has faced significant disruptions, especially since the COVID-19 pandemic. As the pandemic roiled across the globe, regional economies went into virtual lockdowns. This caused many manufacturers to lay off or furlough workers. Once the pandemic eased, many of these smaller manufacturers found it hard to hire back those same skilled workers as many had taken other jobs to keep food on the table at home. In some cases, smaller manufacturers were forced out of business.
     • Global Supply Chain and Single Source Suppliers
       • Over the past couple of decades, our world has gotten smaller. In order to maintain competitiveness, companies have sought out the lowest cost provider for the supplies they need. In many cases, large corporations came to rely on one single source of supply for certain items. Thus, if a disruption hits even the smallest of those suppliers, it can bring a massive global production system to a halt.
       • As international single source suppliers went into lockdown, new vehicle manufacturing plants located elsewhere were forced to suspend production. Examples of major suppliers include Bosch, Continental, Denso, Magna International, and ZF Friedrichshafen, which provide various critical components to automakers.

2. Microchip Shortage

   • Modern vehicles rely heavily on microchips for various functions. The ongoing global shortage of microchips has severely impacted the availability of many automotive parts.
   • Global Explosion of Microchip Demand
     • Pre-COVID, microchip production was one of the fastest growing industries in the world. These small chips now power everything from the phone in your pocket to the refrigerator in your kitchen and the car in your driveway. The COVID pandemic brought on an unforeseen surge in demand for electronics with the world driven to work-from-home. New manufacturing capacity takes at least 3-5 years to plan and bring online, so there was an immediate shortage.
   • Emerging New Technologies
     • For years, the auto industry has relied on single-purpose computer microchips that perform only one function. In the last 5 years, the trend in electronics has accelerated into more modern, multi-faceted microchips that perform multiple functions on one chip. As new microchip production facilities are brought onboard, they are focused on producing the latest and fastest chips, which are more profitable for the producers. So the older, single-purpose chips used in vehicles for decades are simply less available.

3. Increased Demand for Repairs

   • With the difficulty in sourcing new vehicles, many people are holding onto their existing cars longer. This has led to an increase in demand for repair parts as older vehicles require more maintenance. During the pandemic, with severe shortages of new vehicles and inflated prices on used vehicles, many consumers chose to hold onto their existing vehicles. That meant an uptick in total vehicle repair work and an acceleration of the use of repair parts on warehouse shelves everywhere.

4. Labor Shortages

   • The automotive industry, like many others, is experiencing a shortage of skilled labor. This shortage affects the production and repair processes, leading to delays and reduced availability of parts.

5. High-Tech Components

• • Vehicles from 2015-2020 often include advanced technology, such as various sensors and cameras, all of which are more complex and harder to replace. The shortage of certain of these high-tech components further exacerbates the issue.

As Technology Advances, Replacement Parts Will Become a Bigger Issue

Think of our life outside of vehicles. How many times have you repaired your cell phone or laptop, outside of routine software updates? If you are like most people, you haven’t. You’ve simply upgraded your device to the latest design. That may be easy to do for a $300-$1,500 investment, but not so fast on a $30,000-$60,000 vehicle.

Who is Responsible for Building ‘Old’ Repair Parts?

Now, consider this: Why would a parts manufacturer invest in building an ‘old’ part, using ‘old’ technology, for a production run of maybe a few thousand, when they could use that same investment to build ‘new’ parts using ‘new’ technology with the potential of a production run of hundreds of thousands or even millions of parts?  According to the New York Times, some replacement parts will not help your vehicle’s resale value. So be aware of what type of part if being used.  Alwasy seek out manufacturer original equipment parts whenever possible. Technology is changing faster than at any time in our history.  What used to take 20 years now takes just a couple. The role of manufacturing replacement parts has typically fallen to smaller manufacturing companies – those very same companies that have struggled the greatest in the post-pandemic world.

What This Means for You

These factors combined have created a challenging environment for sourcing automotive repair parts, leading to longer wait times and higher costs for repairs.

Suggestions for Dealing with Parts Shortages

1. Be Patient:

If your vehicle is currently tied up waiting for repair parts, be patient. Your repair shop or mechanic certainly wants to secure the necessary parts – they need the work, and they aren’t getting paid until they complete the job. So, remember, you’re both in this together. New Car Dealerships are not immune either – here at Karl Chevrolet, we currently have over eight vehicles tied up waiting for parts for significantly longer than normal order times. In each case, we have been working closely with our clients and supplied replacement vehicles where necessary. As always, open and honest communication is the key.

2. Be Resourceful: 

Ask your repair shop or mechanic if they have considered sourcing used parts. On certain components, we have found reputable salvage yards who will sell undamaged parts from a wreck, and many will even include a warranty. When the choice is continuing to wait vs getting your vehicle back on the road, a used part may be the solution. Here at Karl Chevrolet, we have recently sourced a complete Transmission, a steering column assembly, and several smaller parts in this way. In each case, we routinely review any and all options with our customers.

3. Think Ahead:

When it comes to your next vehicle, consider this entire period of time as a lesson on what we might expect in the future. Will it make sense to LEASE your next vehicle? One of the key benefits of leasing is that you get to drive the vehicle during its prime, while under warranty, and avoid potential costly repair bills. Leasing is a great way to stay current with technology and safety as well. At Karl Chevrolet, we are seeing a return to leasing for many customers, particularly with the latest EV models as that technology is sure to continue evolving. Leasing is not right for everyone, but it is certainly worth considering. Be sure to ask questions if you are curious.

4. Perform Routine Maintenance: 

Eveny vehicle has routine maintenance needs. Be sure you know your vehicle’s maintenance schedule and strive to stay on top of it. A good service provider will keep good maintenance records and will report to major third-party providers like CarFax. Consistently bringing your vehicle to a quality provider, like Karl Chevrolet, will ensure you are keeping your vehicle in top running condition and will also help ensure higher resale value down the road.  Maintenance records are becoming a bigger and bigger factor in determining resale value.  Also, a quality shop will always provide a complete mechanical inspection for you. Pay attention to third party review sites like CarFax.com, DealerRater, Google, and even Facebook.

While we have spent this time outlining the many layers of issues that have brought us to this point, we hope these suggestions provide some practical steps forward. At Karl Chevrolet, we’re committed to working through these challenges with you and finding the best solutions for your automotive needs.