Current:Home > MyUnited Auto Workers strike could drive up new and used car prices, cause parts shortage-InfoLens
United Auto Workers strike could drive up new and used car prices, cause parts shortage
View Date:2024-12-23 12:03:38
If the auto workers strike continues for a couple weeks, it could strain the supply of popular vehicles and quickly drive up car and truck prices.
While it's still too early to tell how long the strike will last and how many auto plants will be affected, consumers are already concerned about how the work stoppages will affect their ability to buy a new or used vehicle, or repair one they already own.
"Consumers are definitely getting jittery wondering what to do. It's a nervous time for them, and I don't know if they realize that the biggest issue will be parts," Tom Maoli, a Ford dealership owner in New Jersey, told CBS MoneyWatch. "That means tires, breaks, anything you need to change and keep your car running."
If the strike resolves over the course of the next few days, the effects on dealers and consumers will be minimal, according to experts.
60 days of inventory
The Big Three automakers — Ford, GM, Ford and Stellantis — whose workers are on strike, grew their inventories in August in anticipation of a potential worker strike. They have about 50 to 60 days' worth of inventory on hand, according to Cox Automotive, a source of auto industry information.
Dealers are also comfortable with the volume of vehicles on their lots, a recent survey measuring dealer sentiment from Cox Automotive found.
This time a year ago, dealerships said inventory issues were the top factor holding back their businesses. This year it ranks much lower. "Today, they are far more concerned about interest rates, the economy overall and vehicle affordability," Cox Automotive spokesperson Mark Schirmer told CBS MoneyWatch.
"Dealerships have sufficient inventory to meet consumer demand, for the time being," he added.
Price hikes
Maoli, the Ford dealership owner, said if the strike continues for two weeks, he'll start to feel the pinch, and would expect to hike prices by up to 20%.
"Inventories on lots of dealerships will start drying up as they get sold and there won't be enough cars to go around," he said.
Jessica Caldwell, executive director of insights at Edmunds, a source of automotive information, agrees the key to determining the strike's effects on vehicle prices will be its duration. If it endures, cars will start selling at or above their list prices, or manufacturer's suggested retail prices (MSRPs).
"Right now it's fairly limited, but it his hitting consumers at a time when it's been tough for a long period of time," she said. Interest rates are high and prices on used vehicles are up, "so there are not a lot of great options here," she added.
- How much does an average UAW autoworker make—and how much do Big Three CEOs get paid?
- These are the vehicles most impacted by the UAW strike
- United Auto Workers go on strike against Ford, GM, Stellantis
A month-long strike could cause shortages of some vehicle models, according to Rob Handfield, Bank of America University professor of supply chain management at North Carolina State University. A strike of that length could lead to a roughly 10% increase in prices on vehicles whose production is affected, he estimates.
"If it goes for two months, we probably won't see any cars on lots," he said. "Which means dealers will raise prices on the inventory they have."
veryGood! (1229)
Related
- Stock market today: Asian shares mostly decline, shrugging off Wall Street’s overnight rally
- Tarek El Moussa Reveals He Lived in a Halfway House After Christina Hall Divorce
- When is Valentine's Day? How the holiday became a celebration of love (and gifts).
- Jennifer Lopez laughs off 'Sad Affleck' memes, says Ben is 'happy'
- Veterans face challenges starting small businesses but there are plenty of resources to help
- Robert Downey Jr. announces on Golden Globes stage: 'I took a beta-blocker.' What do they do?
- Mean Girls’ Daniel Franzese Reveals Where He Thinks Damien Is Today
- Ex-UK Post Office boss gives back a royal honor amid fury over her role in wrongful convictions
- Pistons' Tim Hardaway Jr. leaves in wheelchair after banging head on court
- Donald Glover, Caleb McLaughlin play 21 Savage in 'American Dream' biopic trailer
Ranking
- ‘Maybe Happy Ending’ review: Darren Criss shines in one of the best musicals in years
- Are Meryl Streep and Martin Short Dating? His Rep Says...
- Moon landing attempt by U.S. company appears doomed after 'critical' fuel leak
- Judge issues arrest warrant for man accused of killing thousands of bald eagles
- FanDuel Sports Network regional channels will be available as add-on subscription on Prime Video
- 'Night Country' is the best 'True Detective' season since the original
- A fuel leak forces a US company to abandon its moon landing attempt
- Wisconsin judge rules that absentee voting van used in 2022 was illegal
Recommendation
-
College Football Fix podcast addresses curious CFP rankings and previews Week 12
-
NFL wild-card weekend injuries: Steelers star T.J. Watt out vs. Bills with knee injury
-
Amy Robach and T.J. Holmes Share Update on Merging Their Families Amid Romance
-
Firefighters investigate cause of suspected gas explosion at historic Texas hotel that injured 21
-
Bears fire offensive coordinator Shane Waldron amid stretch of 23 drives without a TD
-
Colts owner Jim Irsay being treated for 'severe respiratory illness'
-
Princess Kate turns 42: King Charles celebrates her birthday with rare photo
-
Michigan woman wins $2 million thanks to store clerk who picked out scratch off for her