RICHMOND, Virginia – As local businesses continue to feel the impacts of the supply disruption triggered by COVID-19, a VCU supply chain expert said he expected shortages to increase and price increases in the coming months.
“I’m afraid we haven’t hit bottom yet. I think it’s happening again,” said Jeff Smith, chairman of the supply chain management analysis department at VCU. “It takes a long time to replenish the supply chain, and we have used our reserves extensively. So now you realize that we have to re-manufacture a lot of the commodities, and then it’s going to take the time to distribute them. “
Smith said he expected shortages to increase in October, November and possibly December as well, which would impact holiday shopping.
“I would expect delays. I would really, I would do your shopping now,” said Smith.
Meanwhile, Everett Bolling, owner of Auto Kingdom of Virginia used car dealership in South Richmond, said his company, like many others in the auto industry, was feeling the impact.
“So this is a 2012 GMC Yukon Denali,” Bolling said as he walked around the field. “And a few years ago this vehicle was a lot cheaper than it is today and an average consumer might think, ‘Hey, why is the price of the vehicle going up?’
The answer to that? Less inventory.
“We’ve had customers coming from Ohio to buy a vehicle and drive it back,” Bolling said. “And we specifically asked him, ‘Hey, what brings you all the way to Virginia?’ He says the lack of good quality vehicles. “
Bolling said his Auto Kingdom of Virginia lot was half full.
“It’s really affecting us right now in 2021,” Bolling said.
He said shortages of quality cars have caused prices to increase for dealerships and hence for customers as well.
“The major auto dealers buy all used cars, which makes inventory less accessible,” Bolling said. “It’s a domino effect down to the smallest dealers.”
But he added that his company was still committed to giving customers a good deal and a vehicle.
“We keep them as low as possible, which is reasonable for both ends, the dealer and the consumer. So we try to meet in the middle,” Bolling said.
Regarding shortages, Smith said General Motors doesn’t stock computer chips when they have the chance, and now chips are in short supply.
“So many cars now rely on microchips for so many things. If you don’t have them, you can’t produce new cars,” Smith said.
He added that the shortages have extended beyond vehicles.
“I think we’re going to run out of everything, for the most part,” Smith said.
He predicted we might start to rebound in 2022, but said it would be a slow recovery that could last for years to come.