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The Phil Long Ford dealership is on Motor City Drive in Colorado Springs. Colorado’s new vehicle market is expected to nosedive in the fourth quarter with most dealers out of inventory because of supply-chain issues, according to a forecast from the state Automobile Dealers Association.

Colorado’s new vehicle market is expected to take a big U-turn in the fourth quarter as supply issues have left most of the state’s dealers with little new inventory, according to a forecast.

The Colorado Automobile Dealers Association forecasts that new vehicle registrations in the final three months of the year will decline 23.2% from the same period a year earlier, with most dealers forced to sell vehicles for delivery up to eight months later. That is a major reversal from the third quarter, when registrations were up 14.5% from the third quarter of 2020 to 63,286 vehicles.

“We won’t have enough product to sell. Most dealers are out of new cars. The vast majority are telling me their inventory is down by 90%,” said Tim Jackson, the association’s president.

“There are more cars on order now then anytime in history — probably 6 million or 8 million nationwide from new models, customers who have ordered new vehicles through the dealer and dealers rebuilding inventory — and it will take six to eight months to fill those orders. And in the meantime, the backlog will continue to build.”

Jackson estimates automobile manufacturers won’t catch up to demand for two or three years. Automakers are facing shortages of everything from semiconductors and other electrical components to aluminum, steel and tires. As a result, the majority of new sales that will happen in the fourth quarter are vehicles that were ordered from manufacturers a month ago or more.

Colorado dealers had mostly recovered from the pandemic in the first nine months of the year, with new vehicle registrations up 18.5% from the same period last year and down just 0.9%, or about 1,600 vehicles, from the same period in 2019 before the COVID-19 pandemic slowed car production. Even with the big decline in the fourth quarter, the association still forecasts registrations will finish the year up 6.6% from 2020. But with inventory shortages lasting through next year, registrations are forecast to be flat compared with this year.

New vehicle registrations have been strongest during the first nine months of the year in northern Colorado and in the Denver area, jumping 21.6% and 20.1% from a year earlier. New vehicle registrations in southern Colorado were up 12.9% during the same period and new registrations in the Western Slope were up 17.9%.

The used vehicle market has been nearly as strong as the new vehicle market, with statewide registrations of used vehicles in the first nine months of the year up 18.2% from the same period last year.

Shawn Flynn, chief operating officer of Phil Long Dealerships, said the Colorado Springs-based company has 780 new vehicles and 1,300 used vehicles in stock, which hasn’t changed much in the last few months.

That’s down about two-thirds, however, from what Phil Long had on hand before the pandemic began in early 2020. He said the dealership group, which operates 18 dealerships in Colorado and New Mexico, has been able to keep up with consumer demand.

“We have about a one-month supply of vehicles. The amount of vehicles we can order from our manufacturers is starting to return to normal, but we won’t see those vehicles until next year,” Flynn said. “We have been able to keep up with demand by going out and finding vehicles all over the nation to sell. We may have to pay more than we would have in the past, but we need inventory because the demand for vehicles is there.”

Registration numbers reflect consumer purchases of passenger cars, light trucks and sport utility vehicle made about two months earlier since buyers have 60 days to register a new vehicle.

The association’s forecasts are based on a percentage of seasonally adjusted national sales estimates, which are forecast to fall from 17.1 million vehicles during the second quarter to 12.5 million vehicles in the fourth quarter.

Contact Wayne Heilman 636-0234 Facebook Twitter

Contact Wayne Heilman 636-0234



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