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Unprecedented shortage of new cars a challenge for Bakersfield auto dealers, customers

Some car lots in Bakersfield are looking downright desolate as a global shortage of new vehicles affects local dealerships and customers alike.

A worldwide squeeze on microprocessors — new cars use hundreds of them — is slowing down the delivery and availability of 2021 models in Kern County and across the country. And that's causing a spike in the sales of used cars and causing upward pressure on prices across the board.

"Right now we have a total of 50 new Chevrolets and Cadillacs on the ground," said Ted Nicholas, president and dealer operator at Three-Way Chevrolet Cadillac at the Bakersfield Auto Mall.

Fifty may sound like a lot, but Nicholas said there have been times when the dealership could boast 800 new vehicles on the lot.

"I believe we're bottoming out right now," Nicholas said of the reduced inventory. "Next month will be a little better and it should continue to improve."

But the cause of the chip shortage, he said, does not have a quick fix.

"The chips — only 12 percent are manufactured in the U.S.," he said. Most of the other 88 percent are made in the Far East, including China and Japan.

"This chip crisis," he said, "will continue into 2022."

At Jim Burke Ford Lincoln, the only car inside the showroom Thursday was a 2020 Cobra GT 500. Beautiful, but not quite new. A few 2021 models were displayed outside, but the pickings looked slim.

"You're probably wondering why we have an empty lot," said Jim Burke President Joe Hay. "It's a really unusual time in the business."

Like so much that has happened over the past year and a half, the root of the problem began with the coronavirus.

Early on in the pandemic, auto purchases fell sharply, car rental companies cancelled their fleet orders, Nicholas said, prompting automakers to cancel their orders for chips. But then demand came back big — when the semiconductors were out of the pipeline.

"We had a good year last year," Three-Way's Nicholas said. "But in the first five months of this year, we're up 30 percent over last year."

John Pitre, chief operating officer at Motor City Buick GMC, said he can recall other times when demand temporarily exceeded supply, but he doesn't remember it being quite this profound.

Motor city has about 100 new vehicles "on the ground," Pitre said. More than 1,000 are coming, "some built, some waiting to be built."

On its website, about 500 new autos are available, including the 100 on the lot.

"We all are facing the same issue," Pitre said of Motor City and its competitors. "The market is bigger than the supply."

For local car-buyers, these powerful market forces can make buying and selling a challenge or a boon.

Local teacher Rachel Lenix said her daughter began shopping for a car late last year. Because the color she wanted wasn't available on the lot, she placed a deposit on a vehicle that was yet to be built.

"She was told the car would be delivered in February," Lenix said. "In February, she was told March, in March she was told May or even possibly June. She is now in June and still waiting.

"The worst part is she traded in her lease with the assumption the car would be ready in February. So now she’s without a car."

Indeed, some car companies have had to pause operations, contributing to a spike in prices for some new cars, and a jump in demand (and costs) for used cars.

Bakersfield resident Chris Cruz-Boone said she and her husband went to Arizona to get the model they wanted.

"It was that or wait two months for one to be delivered."

"We ended up buying used from a dealership," she said in a text message. "But we actually flew to Phoenix and drove the car home just to get one."

Their SUV had been stolen earlier this year, and they needed a replacement fast.

"The best deal we could find within 100 miles (of Bakersfield)," Cruz-Boone said, "was $5,000 over MSRP (Manufacturer's Suggested Retail Price) and a two-month wait for the car."

On the flip-side, consumers are getting great trade-in value for their used vehicles.

Has this been tough on the sales teams?

Nicholas said there will be no layoffs. And Pitre said Motor City is actually expanding its sales crew.

Fewer customers are coming in to "kick the tires" and shop on the lot, Pitre said. But Internet shopping doesn't mean salespeople are being bypassed. On the contrary, it usually takes more time to manage an Internet sale than a traditional transaction, he said.

Despite the healthy demand, is the shortage costing dealers sales?

"The demand is there," Nicholas said, but the cars are not. "Last month, I could have sold 100 more units."

Reporter Steven Mayer can be reached at 661-395-7353. Follow him on Facebook and on Twitter: @semayerTBC.