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story.lead_photo.caption Like many other automobile dealerships, Riley Chevrolet Buick GMC is struggling to keep inventory on the lot. Due to the computer chip shortage, dealerships are extremely limited in their ability to get in new vehicles. As of Friday morning, the Jefferson City dealership has seven new, one-half ton trucks available for customer purchase. Photo by Julie Smith / News Tribune.

Car manufacturers began feeling the effects this spring of a global computer chip shortage, which affected inventories at local car dealerships.

Dealers believe inventories will increase in the next couple of months — just not to the levels seen prior to the shortage.

The shortage of the chips, used in cars as well as computers and other products, was caused by worldwide demand for electronic goods that intensified because of the COVID-19 pandemic, along with problems with the supply chain to get the chips to the industries that need them.

According to Goldman Sachs, 169 U.S. industries embed semiconductors in their products. The bank is forecasting a 20 percent average shortfall of computer chips among affected industries, with some of the components used to make chips in short supply until at least this fall and possibly into 2022.

General Manager Tom Stegeman said inventory at Joe Machens Capital City Ford in Jefferson City has been at the lowest level he's seen in the more than 20 years he's worked there.

"Not only have we had the chip shortage, but during the pandemic, automakers shut down for three to four months, and that meant millions of cars weren't produced," Stegeman said. "The good news is that Ford has said they don't plan on doing any more plant closings and all plants are resuming production. By the end of the year, we should be close to the inventory level that we had at the end of 2020."

At Jefferson City Honda on Missouri Boulevard, General Manager A.J. Giblin said new car inventory is lighter than usual but they have managed to keep their stock up "pretty well," with more than 200 used cars in stock.

"Car values have risen in the last six months, and while July might be tight again on new car stock, we're looking for things to pick up in August and September," Giblin said.

"We're still selling vehicles, but our inventory is way down on new vehicles," said Kevin Riley, owner of Riley Chevrolet and Riley Toyota on Christy Drive. "We have sources to buy used cars, and we have a good selection there."

Riley said their new vehicle sales are mostly pre-selling of vehicles. If someone has an idea of what they are looking for, the sales staff can see what is available in the Chevrolet stock, and if that doesn't fit the customer's needs, they can pre-order a vehicle for when it comes in stock.

"That's led to most of our new cars being gone instantly," Riley said. "That's why we can't have more new vehicles on display — because it's hard to get the inventory. We can meet customer needs, but they may have to wait longer to get what they want."

Stegeman said the Ford dealership is offering an additional rebate for those ordering a vehicle instead of taking one off the lot.

"For people looking to take a vehicle off the lot, it may not be their first choice, so if they are not finding what they are looking for there, they may save a lot by doing it this way," he said. "It's a smart time to order a car. Chips are starting to flow, and probably within the next 90-120 days, the plants should get the backlog of orders taken care of."

If demand stays at its current rate, Riley said he doesn't believe new vehicle inventory will be built back up until early next year.

"It will just take time, and when you look at what we're going through, it could be worse — we could be recovering after being hit by a tornado," he said, referring to the recent reopening of the dealership's Chevrolet location after it took a direct hit in the May 2019 tornado.

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