Car sales are surging, stressing makers and delighting salespeople

In a typical pre-pandemic month, Conicelli Autoplex in Conshohocken, Pennsylvania, sold from 35 to 50 vehicles.

In April, Conicelli made 60 sales.

"I had my best month ever last month," said Patrick Baker, customer concierge of internet sales at the autoplex, which carries new and used cars from Genesis, Honda, Hyundai, Nissan and Toyota.

The sales boom could be attributed to people avoiding mass transportation during the pandemic, as well as buyers' confidence that with stimulus checks they can afford a car, analysts and car dealership employees said.

Consumer demand, not only at Conicelli, has led to a steep decrease in available cars, particularly roomy and more fuel efficient crossovers and SUVs.

Chips and silicon markets

New and used car shortages have become ubiquitous during the pandemic, a phenomenon exacerbated by a lack of chips for onboard computers that control horsepower and fuel economy, among other features, according to MAU Workforce Solutions, a staffing and recruiting firm. The pandemic, which shut down global business, delayed chip production even as demand for cars increased.

More recently, prolific COVID-19 vaccine production spiked the use and price of silicon — a critical element in making car chips that also is used to make vaccine vials — and placed extra strain on vehicle manufacturers.

At Conicelli, customers have taken to reserving and purchasing cars before they get to the lot, Baker said. The vehicles without pre-buyers get snapped up immediately upon arrival, he added.

Used car prices, too, have increased, which benefited individual sellers: They have gotten more in trade-in values, according to JD Power, a data analytics firm. The company reported the average price for a new car was $37,200 in the first quarter of 2021, an increase of 8.4% since the first quarter last year. For used cars, the average price rose to a record high $21,558 last summer — and continues to rise.

The demand trend applies even to the most expensive cars.

The Lexus dealership in Mount Laurel, Pennsylvania, has averaged about 150 car sales a month, an increase over 2019, said Ed Sunday, the general manager at the dealership.

"The RX, NX [models] — the SUVs are dictating the pace of the market," Sunday said. Customers have been particularly interested in fuel-efficient hybrid cars, he added.

Demand for Lexuses have been "very competitive in the mid-Atlantic region," a trend that has contributed to "a sense of urgency," he said.

New cars come to Mount Laurel from factories in Kentucky, Ontario, Canada and Japan. Last month, the Ontario plant shut down for about a week-and-a-half when eight workers tested positive for COVID-19, which further delayed production.

Shortage of mechanics

A decrease of labor has also stressed car manufacturers, with two critical subsets of vehicle workers — auto service technicians and mechanics — leaving the field. There were 756,000 such employees in 2019, according to the U.S. Bureau of Labor Statistics, a figure that was expected to fall 4%, to 728,800 in 2029. National median pay was $44,050, and techs and mechanics routinely face later hours and are required to move at breakneck speeds.

Many consumers sought out crossovers and propelled that category to command the biggest share of national market sales at 45%, Stine said. Pickup trucks were at 18%, SUVs at 9.2%, and small cars at 9.1%.

Some things have changed, Baker said. Consumers now take cars out on test drives alone to prevent the spread of COVID. To avoid sitting inside the dealership, employees bring all the paperwork to a buyer secluded in their car and secure a sale.

"I see the brighter side of things," Baker said. " ... I would say that right now, things are definitely looking up."