The U.S. auto industry has undergone a permanent structural shift post-COVID.
For the month of August, let’s talk about new vehicle availability. It has been a while since we discussed why we still cannot just get any car we want, or the exact vehicle we want, with the colors and equipment exactly how we want it.
COVID19 did a number on the automotive industry! New car manufacturers are still not up to the speed or volume they were at prior to the COVID19 outbreak and the automakers say it will never return to what it once was, just 7 years ago.
- Permanent price increases
- Shift towards high end cars
- Contracted new car market
- Online purchasing, virtual showrooms and remote delivery
- Fewer Americans commuting to work
Let’s talk about Toyota for example. The Toyota RAV4 continues to be America’s best-selling SUV but did you know that as of this year, the only models available are either hybrid or plug-in hybrid (no gasoline only models!).
My main Toyota supplier is one of the largest Toyota dealerships in the PNW. For this story, I found that out of the 87 Rav4s on their website, not a single one is in stock. Not only that, but when I dug further, I found that all 87 vehicles are either in production or in transit from the assembly plant to the dealership.
But wait, there is more! Out of the 87 vehicles, about 80 are already sold. Yes, that’s right. These cars have been sold sight unseen. They were sold with no test drive, no negotiation, and a first come first serve basis.
In pre-covid years, car buyers could be picky about things like paint/interior colors, trim level, accessories, add-ons etc. They went to a dealership, talked to a salesperson, took a test drive, negotiated and then drove the car of their dreams home. In 2026, buyers may continue to want what they want, but in reality, they will accept any vehicle they have the ability to get their hands on.
Of course, once the vehicle arrives, you do have the ability to decline the purchase and that’s okay with the dealership because they have an enormous list of willing buyers waiting in the wings for a cancellation. And these buyers will not be picky about things like paint/interior colors, trim level, accessories, add-ons etc, etc. To be honest, I have sold 12 New 2026 Toyota Rav4’s as a result of cancellations and not once has the first client I called not bought it on the spot.
The supply is extremely low, while the demand is very high. Every Toyota dealership (and all dealerships) has a long waiting list of clients wanting to purchase new cars. Some are even taking deposits on vehicles that are still in production. These buyers have no details other than it’s a model. Putting money down, however, does not mean you are first in line to purchase the yet to arrive vehicle. In fact, some dealers will take multiple deposits for the same car then sell it to the client who arrives first. Not surprisingly, the client almost always buys the car, regardless of details.
The good old days are gone. It is truly sad what has happened to the automotive industry as a result of the COVID19 outbreak. The damage is done, and the supply of new vehicles across the board will never again be what it was prior to the pandemic.
Thank you all for reading. I appreciate your feedback, your questions, and your business.
Larry Ferguson can be reached at fergusonautobrokers@gmail.com or by calling (503) 930-1493.
