What Parts Shortage?
May 27, 2021—Speaking to body shop owners and managers throughout the normal course of reporting an issue of FenderBender often means touching on subjects beyond the core intent of the phone call.
One concept that kept popping up throughout the early months of 2021 was that it was difficult to get parts, anecdotal instances of long backorders and other roadblocks that were attributed to the same supply chain issues caused by the pandemic that were causing shortages elsewhere.
But has there really been a parts shortage? Greg Horn, PartsTrader's chief innovation officer, took a closer look at the question during the PartsTrader Industry Update on May 18, putting into question the veracity of rumors regarding what he termed the "Parts Pandemic."
One shortage that is very much real is that of semiconductors, he said, demand for which shot up at the beginning of the pandemic as consumers grabbed up consumer electronics and more to make homes as comfortable as possible as pandemic lockdown set it.
That shortage is being felt deeply by the automotive industry, with OEs like Ford and GM manufacturing as much as possible of vehicles and then retrofitting them with semiconductors when the parts become available, Horn said.
What about parts needed by collision repairers, though? Horn ran through a number of possible causes for the shortage, debunking them in turn. The apparent shortage wasn't caused by the six days during which the Suez Canal was blocked earlier this year, nor is it being caused by rumored backups at the Port of Los Angeles—Horn offered screengrabs showing normal activity at what's called "America's Port."
Going from macro causes to possibilities that could more directly make parts seem short, Horn mentioned a Texas plant, affected by the petrol shutdown caused by this spring's winter deluge of the state, whose manufacture of seat foam and plastic trim pieces was temporarily shutdown. As he pointed out, those components are largely needed on the frontend of manufacturing vehicles.
The only collision repair parts-related shutdown he could come up with was related to Hermosillo, Mexico, plants that make parts packaging for OEMs. Two plants had slowed production due to COVID-related staffing shortages.
With no tidy, supply-side cause for a parts shortage, Horn turned to the numbers. He noted PartsTrader facilitates $100 million in parts sales per month, though none of the metrics—quoted delivery time, average number of parts quoted per estimate, or five categories of cost per part—had increased to indicate that demand had increased due to a dip in supply. Overall, Horn said, prices have been flat so far through 2021.
"So as we look at all of those components, we really don't see any impact on the collision industry through the middle of May, when it comes to parts shortages," Horn said.
The same can't be said for new vehicles, and increasingly, used vehicles.
For example, Horn said Toyota's April 2021 sales were up 183 percent over the same month in 2020. As supplies of new cars are run through, he said buyers will be looking for used vehicles next. Used car prices were up 13 percent over a year ago, Horn said.
Franchise used car dealers were reporting a 31-day supply of used vehicles, he said, while usually at this time of year they'd have a 45-day supply.