SIOUX CITY – Ideal Wheels on Sixth Street’s “Auto Row” in Sioux City has been around for 33 years. Previously, the company sourced much of its inventory from the tri-state area. Right now though, Ideal Wheels needs to cast a wider net to keep the cars in the field.
Doug Johnson has worked for the dealership for 23 years, the last three of which as co-owner.
“Sales are good. Inventory is obviously hard to come by. We have to buy our inventory further away, which has led to transportation issues,” Johnson said. According to him, that means traveling to Michigan, Texas and Florida, which makes it more difficult for cars to return to Sioux City. Johnson said that even when Ideal Wheels can buy vehicles in big cities like Omaha or Kansas City, it can take longer than before to get the cars on the lot.
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Much of these changes are due to the COVID-19 pandemic which has disrupted almost every business sector in the country in one way or another. A February 3 article from CNBC found that shortages of computer chips, which are needed in newer models, have caused production to lag and forced the second-hand market to further satisfy consumer demand.
“Older used cars (4-7 years old) cost an average of $31,046, up nearly 50% from $20,757 before the pandemic“, reported Sarah O’Brien in the story.
According to Jason McClure-Greer, who has worked at Knoepfler Chevrolet in Sioux City as a sales manager for the past three years, about 70% of the century-old company’s current sales are used vehicles, which according to it is higher than in the past. .
“Later models are probably the most sought after vehicles and I think that might have something to do with the lack of new car availability,” McClure-Greer said.
To acquire these used models, McClure-Greer said Knoepfler representatives attend auctions every week, buy vehicles on the street and constantly advertise to maintain a “full used inventory.” Currently, he shared that the company’s inventory at 100 Jackson St. includes about 20 to 25 new units and nearly 100 used vehicles on the lot.
In some cases, McClure-Greer said it can now take up to three to five months for new car and truck orders. Before the pandemic, the range would be around one to three months. “We had a break at our Colorado plant, so it’s a little slower to come back,” he said.
At Ideal Wheels, Johnson said the inventory number is around 80.
“Probably 80% of our business is crossovers and SUVs and the other 20% is trucks,” he said.
Johnson noted that selling prices for these vehicles are up, but so are trade-in values at the store. “We’re pricing our cars very aggressively (to be competitive) and prices are going up,” Johnson said. According to him, this is one of the weirdest times to be in the car sales business.
“As new car dealerships have struggled for new inventory, it’s forced those dealerships into more of the used inventory than they were before,” he said.
When exactly these new inventory issues will end, McClure-Greer said he’s heard it will happen before the end of 2022.
“WWe’re kind of following what our manufacturers are telling us… They’re letting us know that things will be back to normal this year,” McClure-Greer said.I think the hardest part was the amount of new car inventory we had in the field…Obviously adjustments were made (and) adjustments are still being made.”
Jared McNett is an online editor and reporter for the Sioux City Journal. You can reach him at 712-293-4234 and follow him on Twitter @TwoHeadedBoy98.