As supply issues remain and buyers’ habits evolve, Aurora area car dealers still hope for busy autumn

Like any car dealer, St. Charles resident Emir Abinion, 58, CEO of the Fox Valley Auto Group that includes Volkswagen, GMC and a Buick dealership, would like to sell more cars, especially with the airwaves currently being flooded with end-of-the-summer promotions and special financing.

But despite an inventory that has marginally improved the last 90 days, those numbers are far from where they were a few years ago, numbers that Abinion said might never be reached again.

“It’s interesting as we have this conversation with our tier three advertising. Tier one is the manufacturer’s advertising and tier two is a local market area, like a group of market dealers that happen to advertise together,” Abinion said. “Tier three is what the dealers themselves do for their own branding and their own dealership. It’s been a contentious conversation the last year – at one point, there’s very little inventory so what are we advertising?”

Oli Ponce of Elgin, 52, who works as the general manager at Hawk Nissan of St. Charles with 35 years in the car industry, said consumers shouldn’t assume end-of-the-season ads to be hitting all their targets.

“There are these national ads that go out all over the country. We can’t order anything – I can’t speak for other brands but for us – it’s whatever we can get from the factory,” he said. “The national ads, let’s say for something like the Nissan Leaf, which is huge in California. You might be able to find cars in certain areas but not always here in the Midwest. In some areas you might find two or three, sometimes a bunch. Until the gas crunch, the Midwest wasn’t known for hybrids or electric cars – we’d sit on them all year and no one would buy them. When gas went up things changed.”

While car ads may be hawking great deals being available on cars that don’t exist on lots, dealers are faced with the dilemma of being out-of-sight, out-of-mind if they don’t keep brand awareness out there in public.

“The other issue is if people don’t advertise and you’re the only one who advertises you’ve got a larger share of the voice,” Abinion said.

Jonathan Smoke, chief economist for Cox Automotive, the world’s largest automotive services company which owns Kelley Blue Book and more, said auto manufacturers are ramping up their ads “because they know people are ‘pre-buying’ cars.”

“The inventory situation has not changed for more than a year now. We’ve had week-to-week inventory that has essentially been the same for more than a year and it’s a record low – roughly 70% lower than it once was and we’re really seeing no evidence that that is turning around,” Smoke said. “The reason dealers are advertising is because there has been a substantial shift to selling on order which will continue to keep inventories lower for months to come because cars disappear before they even have time to park on the lots.”

Normally, Abinion said his lot would hold “a couple hundred vehicles” adding that “I don’t see that number happening any time soon.”

“It’s not just us it’s the whole world,” he said. “They are building 2023 models right now and this doesn’t have an impact on building them. It’s not just the chip shortage as there are also supply issues as well as logistics, if you’ve got cars coming from different areas.”

Sales, market analysts say, have continued to fall. Smoke notes new car purchases are predicted to reach just 13.7 million vehicles sold – a decline of 8% from year and a number he said “will end up being the lowest number we’ve had since 2012.”

“This is likely the bottom and the absolute bottom was May but this is the time of the year when we should be seeing the new model year vehicles and dealers would historically be discounting the old ones to move them out but the new ones have been slower to arrive,” he said.

General sales manager at Gerald Hyundai in North Aurora Alex Kapouranis said 70% of his sales are ordered in advance, with the rest coming from the small supply of vehicles that trickle in.

“We advertise our cars on the website as either ‘in-stock’ or ‘in-bound’ and I have close to 50 new cars in stock now because we got about 10 trucks with deliveries in mid-August, that’s the most we’ve had on the ground in months,” Kapouranis said recently. “Right now our inventory is pretty healthy.”

Kapouranis says having more cars on the lot has increased foot traffic slightly but that buyers’ habits are changing.

“Having more cars on the lot doesn’t increase your business as much as people might think. The market is changing, the way people buy cars. They research everything online and a lot of people do all the numbers and check the car out on videos,” he said.

Smoke advises that people “do their homework and broaden their search for a car beyond their local neighborhood dealer.”

While Ponce said he can’t order cars from the factory, Kapouranis said Hyundai allows dealers to put “a priority request” on an order so that it gets moved up in the production chain.

“You don’t order one per se, but if a customer is looking for a specific car I put in a priority request with Hyundai and then they make sure they build that car and prioritize it to me instead of someone without that request. It’s not an order but a priority request so you will be the first one to receive it once the car is built and is available,” he said.

Parts including something as basic as keys are still in short supply, Kapouranis said, adding that while 2023 models may be released a little later he expects the supply – at least of Hyundai – will be greater.

“I really think the supplies at least for our brand are going to increase,” he said.

David Sharos is a freelance reporter for The Beacon-News.