Looking Ahead to 2022
Surviving and Thriving in the Automotive Industry
We finally made it! It is the end of the year and 2022 is fast approaching. A lot has happened in 2020 and 2021. We thought it would be the perfect time to look back and highlight some of the challenges as well as the victories that we have had over the past 24 months. The industry has been shaky to say the least. Dealerships all over the country have had inventory shortages because of a larger chip shortage that has been affecting major car manufacturers, costing the industry a crazy 210 billion dollars in 2021. Many of the above businesses had to slow down production to wait for chips to become more available, something experts are saying won’t happen until early 2023.
The situation we find ourselves in, like many problems we faced in the last year, started with the COVID-19 pandemic in March of 2020. As a result, several productions had to scale back to meet the new down curve of demand due to new government and city rules about going outdoors. The mass industry shutdowns and quarantine led to many manufacturers believing the demand for new cars would go down in 2021, along with everything that had already started spiraling downward in 2020. This slow-down naturally gave a false sense of security in a decision to order fewer manufacturing parts like microchips. To put things in perspective, a Ford F150 takes about 1400 microchips to be able to do everything that it does.
2020 was a major learning and turning point for the auto sector, chip manufacturers, car dealerships, and many other businesses. Flexibility was now an unbelievably valuable characteristic that a business would need to survive. Manufacturers like Honda, Toyota, and some other Japanese auto manufacturers had the better end of the stick. They took early action and started scaling back along with closing assembly lines early in January and February of this year. This can give some insight into why we are seeing more profit coming from these companies in the recent months compared to manufacturers from different countries, many of which did not start their shutdowns until the Summer.
Other businesses tied to the industry, such as promotional products businesses like Gallagher Promotional Products also felt the trickle-down effects of the shortage. The big kick-back that left dealerships without cars on their lots also meant that they were not bringing in the income to buy promotional products. In 2020, after the Pandemic started, we began selling Personal Protection Equipment (PPE) like masks, hand sanitizer, and wellness kits. We also designed new products centered around first responders and medical staff appreciation. This was the first of many creative ways we changed how we operated in an effort to offset and diversify. The slow down gave us a little time to switch to our new website and work on new products. We added a new section called the Dealzone to our website and even opened an Amazon storefront Many other businesses had to get creative like us to keep moving forward. The greatest lesson the many involved industries could learn from this would have to be “if nothing else be flexible.” That is because flexibility is one of the better ways to mitigate uncertain situations.
The begining of the new year is the time to start planning for the future. We here at GPP aim to help you during these times. We offer a large variety of items, like our model years, that can help you stay organized this year. Browse our catalog, visit our website (gppinc.com) or contact one of our sales representatives at 1-800-367-8458 for your needs today.
