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Some parts shortages are due to factors beyond the strike, insiders say.

Dealers’ Parts Supplies Hold Steady

An end to the UAW strike may ensure Fixed Ops continue to run smoothly.

For some dealers, the reported settlements between the UAW and the Detroit Three come just in time. That’s especially true of dealerships running low on original equipment parts after about six weeks of an unprecedented strike against all three automakers at once.

“We’re seeing the biggest impact is starting now,” says Dan Clara, senior vice president of operations for Asbury Automotive Group, Duluth, GA.

“We had enough days’-supply within our parts inventory when this all started, where we were still able to service our cars and take care of the guests in a timely fashion,” Clara says in a recent third-quarter earnings call.  

“But as this continues to prolong, the impact is going to be greater. And unfortunately, the one that gets affected is the end consumer,” he says.

That was before Stellantis and the UAW announced a tentative settlement on Saturday, Oct. 28. Without official confirmation as of early Monday afternoon, Oct. 30, General Motors is also widely reported to have reached an agreement with the union, along similar lines as Ford and Stellantis.

It remains to be seen how long the affected parts plants will take to restart production.

The six publicly traded, new-vehicle megadealer groups say they stocked up on commonly used parts for maintenance and repairs in advance of the UAW strike, which began Sept. 15.

In addition to ordering more parts, Clara says Asbury has the scale to stretch a limited supply of parts by trading them within the group. Asbury’s competitors make similar remarks in recent conference calls to announce third-quarter earnings.

“We stocked up on fast-moving parts in advance of contract negotiations, so we’re still living off that extra stock. We’re also able to leverage our other stores around the country,” says Daryl Kenningham, president and CEO of Group 1 Automotive, Houston.

Chris Holzshu, COO at Lithia-Driveway Motors, Medford, OR., says that overall, his group’s parts availability is “the highest we’ve had for the last six months.”

He says Lithia is experiencing some “pressure” on supplies of certain parts in extra-high demand because of recalls, but on an Oct. 25 earnings call, he doesn’t attribute that directly to the strike.

As a group, the six public chains report total parts and service revenue of $3.9 billion for the third quarter, up 7.4% vs. a year ago on a same-store basis. Year to date, parts and service revenue is up 8.5% for the megadealer groups, to $11.6 billion.

TAGS: Fixed Ops
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