Automotive supply chain problems began in 2020 and show no sign of letting up in the foreseeable future. However, auto shop owners who understand the root causes of these problems and how to address them will likely fare better than those who aren’t familiar with supply chain management in automobile industry.

Common Challenges in the Automotive Supply Chain

The automotive industry supply chain problems that affect your shop the most will likely depend on your shop’s location and the type of vehicles you work with. Even so, the following list outlines the four most common problems plaguing auto shop owners in the United States.

Inflation

The cost of tires rose a whopping 70% from 2022 to 2024. The cost of other car parts rose more than 8% from January 2022 to January 2023. What’s more, the impact inflation has had on other industries has forced auto shop owners to either pay mechanics more or risk losing skilled workers. Year-on-year labor rates have increased by nearly 5%.

Semiconductor Chip Shortages

The semiconductor chip shortage isn’t quite as bad as it was several years ago, but it’s still causing problems for auto manufacturers and repair shops. The good news is that governments around the world have taken measures to boost the semiconductor chip industry. If current trends persist, the semiconductor chip shortage should be a thing of the past in a few years. Unfortunately, geopolitical tensions could still make it difficult for auto shops to find and purchase the chips they need for certain repair jobs.

Labor Turnover

Many experienced mechanics are either retiring or transferring to different occupations. At the same time, there was a 20% shortfall in auto tech graduates from post-secondary educational institutions from 2020 to 2022. The US auto repair industry is facing a significant shortage of technicians at a time when demand is high due to an increase in vehicle ownership and owners keeping vehicles for longer than before.

Sadly, this is a problem that will likely persist or even get worse in the coming years. Working as an auto technician isn’t easy and many potential mechanics are picking other career paths. What’s more, it’s not as easy to learn the trade as it used to be. Vehicles are more complex than they were in times past, which means that aspiring auto technicians need additional schooling in order to handle a range of maintenance and repair jobs.

Geopolitical Tensions

Geopolitical tensions are so bad that some are referring to it as a “polycrisis”. Conflicts in the Middle East, between Russia and Ukraine, in the Sahel, and in the Balkans are sure to impact the supply chain in 2025. Trade wars could easily erupt this year due to tariffs. This will likely continue to put pressure on the automotive industry supply chain.

Overcoming These Supply Chain Shortages

While the problems may seem overwhelming, they do have solutions. The following measures won’t guarantee that you’ll never run out of needed parts or equipment, but they can greatly reduce the likelihood of supply chain shortages significantly impacting your business.

Identify Immediate Shortfalls

To run a successful business, you need more than just a good business model and a commitment to excellence. You also need wise financial management. Keep tabs on the cost of shop equipment and replacement parts to avoid significant shortfalls. Update financial records regularly to identify any immediate shortfalls that arise.

Avoid Inventory Scarcity

As inflation puts the squeeze on auto repair shop profits, it can be tempting to wait until the cost of certain parts and/or machinery comes down before making a purchase. However, in today’s environment, such a decision could cause serious problems for your shop. Use a program that keeps track of auto shop inventory in real time and replace your stock before you run out of commonly-used parts.

Collaborate with Industry Leaders

The best-known leaders in the auto repair industry are the companies that manufacture the equipment and parts you need to do your job. Don’t hesitate to reach out to these companies if you need a specific piece of equipment, advice on repairing or replacing certain machinery, or help with locating replacement parts. Car manufacturers are also ideal sources of information and assistance. Many collaborate with auto parts manufacturers to promote innovation and streamline production processes, so they’ll understand the shortfalls you’re facing and may be able to offer advice on how to deal with common supply chain problems.

Utilize Tech in Mitigating Order Backlogs

The auto tech industry is very much a hands-on industry. However, technology can play a vital role in not only helping your mechanics do their jobs but also handling tasks such as mitigating order backlogs. Find a program that works well for your shop, train your staff in how to use it, and put technology to work ensuring that each customer receives prompt attention and service.

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Supply chain management in automobile industry repair shops is far more complicated than it was in years past. Auto shop owners face multiple challenges in finding specialized parts and qualified, experienced mechanics. At the same time, demand for auto repair services is higher than ever. Shops that are able to navigate automotive industry supply chain issues could perform well long term.A highly effective way to avoid supply chain problems is to partner with local suppliers. SVI Inc. has two ready-ship warehouses in the United States and stocks more than 40,000 items, including shop equipment and lift parts. We offer resource engineering to recreate discontinued parts or even design custom parts to meet your exact specifications. Our customer service department offers knowledgeable assistance and help with parts information, orders, and more. Contact us by phone or email to find out more about what we offer or to get a price quote for the products of your choice.