Parts, not microchip shortage, causing shop delays

By John Yoswick

PartsTrader’s Greg Horn said that his company isn’t seeing any significant disruption in crash parts availability based on the global microchip shortage, which is impacting new vehicle production. And while shop interviews found lots of evidence of parts distribution chain issues, few saw the chip shortage as the cause.

The global microchip shortage has occurred after microchip production was curtailed last spring early in the pandemic, followed by a sharp uptick in demand for cell phones and gaming devices for those spending much more time at home.

“Meanwhile, as that was ramping up, automotive manufacturers were sort of the last to resume production, and when they started coming back online, they realized they were all of a sudden at the back of the line for ability to buy them,” Horn said.

Microchip producers are working to boost supply, but forecasters don’t expect the shortage to be resolved for some months.

Horn pointed to a number of data points that led him to conclude the shortage isn’t disrupting the collision replacement part supply. Enterprise’s most recent “length of rental” data showed that the average number of days replacement vehicles were in use in the first quarter of 2021 was “essentially flat” when compared to the same quarter in 2020. His company’s internal data showed that the average quoted delivery times for parts going through PartsTrader across all model vehicles did not change significantly in the past 13 months. Looking at parts for just model year 2020 and 2021 vehicles showed even a modest improvement last month compared to April of 2020. Parts on the system are also receiving the same number of bids or quotes on average over the past year.

“As we look at all 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 only real information we had on collision [parts] shortages…is around the packaging plants that two OEs have in Mexico. They absolutely are reporting they had short staff due to a COVID outbreak in that area. So the parts were there, but the plants were not able to get them packaged into the boxes and shipped out. But that is a very temporary situation and we’re not seeing any big impact from that.”

Horn’s assessment seems to jibe with finding a May survey by CRASH Network in which shops were asked about parts delays they are experiencing. Among nearly 200 survey respondents in the first half of May, few if any pointed to parts issues they could attribute to the chip shortage.

“We have seen delays overall, some very long, but no significant things related to chips,” Frank Rinaudo of Frank’s Accurate Body Shop in Slidell, La., said.

Many did express frustration with what they see as more parts delays in general among some automakers, with Ford being most frequently cited.

“I can’t tell you any shortages that were specific to chip shortages, but the back orders with Ford make me wonder how they are still in business, and how their stock price can climb,” one Wisconsin shop owner wrote. “We’ve had several vehicles wait two or more months for parts.”

That type of experience was clear among survey respondents throughout the rest of May as well.

“No chip-related issues, but we have experienced parts delays for common items, such as a fender for a Jeep Renegade, that should be a stock item but is on a 45-day national back order,” an estimator in Nebraska said.

“Parts have us storing several cars, approximately $50,000 worth of repairs, until the last part shows up,” Rexford Cook of Sunshine Collision Center in Boca Ratan, Fla., said.

One Minnesota shop owner said he recently purchased another building, doubling the company’s square footage, with parts delays contributing to his decision to expand. “It’s part of the reason we needed to add floor space, because of dead stalls,” he said.

“We have a completed Honda CR-V requiring an SRS control module that has been on back order for four weeks,” William Luckenbill of Bill’s Collision Center in Washburn, Wisc., said.

“We have been waiting two months for a hinge pillar from GM,” Stephen Bozer of Fix Auto Tempe in Arizona said, also noting that “some Tesla parts have regressed in their time from ordering to fulfillments.”

“We’re not taking the dealer’s word that a part is not available and are searching the country ourselves,” the owner of a multi-shop business in Indiana said.

A dealership shop manager in Wisconsin summed it up by saying, “In my 40 years, I have never seen the supply chain this bad.”

But California shop owner Gigi Walker isn’t letting parts challenges get her down.

“Yes, parts have been a bit on back order, but this gives us a good reason to explain why a car is not moving through the shop as fast,” she said. “It’s an opportunity to really re-look at the repairs needed for each vehicle. I like the slow-downed process better. In the past, it was a rat race. Life is too short.”  •

John Yoswick, a freelance writer based in Portland, Ore., who has been writing about the automotive industry since 1988, is also the editor of the weekly CRASH Network bulletin (www.CrashNetwork.com). He can be contacted by email at john@CrashNetwork.com.