RICHMOND, Va. -- 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 and price hikes to increase in the coming months.
"My fear is we haven't hit bottom yet. I think that's still coming," said Jeff Smith, Chair of the Supply Chain Management Analytics Department at VCU. "It takes a long time to replenish the supply chain, and we've used our reserves largely. So, now you're running into the fact that we have to re-manufacture a lot of the base products, and then it's going to take time to distribute those out."
Smith said he expected shortages to increase in October, November and possibly December as well, impacting holiday shopping.
"I would expect delays. I would really, I would do your shopping now," said Smith.
Meanwhile, Everett Bolling, Owner of the Auto Kingdom of Virginia used car dealership in South Richmond, said his business, like many others in the auto industry, was feeling the impact.
"So, this is a 2012 GMC Yukon Denali," said Bolling as he walked around the lot. "And a couple of years ago this vehicle was a lot cheaper than what it is today and an average consumer would think, 'Hey why is the price raising on the vehicle?'
The answer to that? Less inventory.
"We’ve had clients come all the way from Ohio to purchase a vehicle and drive it all the way back," said Bolling. "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 lot at the Auto Kingdom of Virginia is about half full.
"It's really affecting us right now in 2021," Bolling said.
He said shortages in quality cars led to higher prices for dealerships and in turn, for customers as well.
"The major car dealers are buying all the used cars, so it makes the inventory less accessible," Bolling said. "It’s a domino effect down to the smaller dealerships."
But he added that his business was still committed to giving customers a great deal and vehicle.
"We keep them as low as possible which is reasonable for both ends, the dealership and the consumer. So, we try to meet in the middle," Bolling said.
As for the shortages, Smith said General Motors didn't stockpile computer chips when they had the opportunity, and now chips are in low supply.
"So many cars now rely on microchips for so many things. If you don't have those, you can't produce new cars," Smith said.
He added that shortages expanded beyond vehicles.
"I think we're going to be short on everything, largely," Smith said.
He predicted we may start to rebound come 2022 but said it would be a slow recovery that may last into the coming years.