The United Auto Workers (UAW) strike against Detroit-based automakers is making history in the automotive industry – but the impact on car shoppers may not be significant, at least not yet.
There's a significant risk that the strike may eventually cause car parts and supplies to plummet and prices to rise. However, this would take some time to materialize. Vehicle parts, on the other hand, may be felt much sooner, and repairs could take longer for certain vehicles.
Today, we provide updates on how the recent car industry strike can affect certain vehicle models.
Recent Car Industry Strike Could Trigger Parts Shortages
On September 22, the union put more pressure on the big three Detroit-based automakers when workers walked out of 38 auto parts distribution centers run by General Motors and Stellantis. They didn't take the same step with Ford in good faith, as they've made real progress in negotiations with the automaker.
The move would mean auto parts and supplies from GM and Stellantis models would slow down. The two auto dealerships would have difficulty getting services and repairs, which would slow or shut down their factories down the parts distribution line. While neither automaker has acknowledged significant effects yet, purchasing a new car or finding affordable car loan interest rates would become increasingly difficult.
If the strike doesn't end soon, there could be increased shortages of the two distributor cars that are already in short supply. Vehicle companies with plants in Mexico could keep producing models, provided they have a steady supply of parts.
The Longer the Strike, the Bigger the Impact on Car Prices
We can expect car prices to be unaffected in the earlier days of the strike. However, there's talk that the Big Three distributors (Ford Motor, General Motors, and Stellantis) prepared for the union strike by building up inventory so auto dealers would still have cars to sell if the factories fell silent.
However, strikes are only effective if the targeted companies start losing money. Therefore, to be effective, the union strike would need to last long enough that the automakers run low on spares and inventory they have sitting on a stockpile or pre-filled models. Striking automakers where it hurts may not happen for a long time.
But the longer it takes the Union Auto Workers and automakers to find common ground, the worse it will be for car buyers. There will likely be an imbalance in the supply and demand market for new cars as buyers lose leverage in price negotiations at dealerships.
Car parts shortages could directly impact car repair and service times. However, these scenarios would only come into play if the union strike drags on for longer and proves disruptive. The demand for used, cheap cars for sale could increase in the short term due to the used car prices declining throughout the year. However, an extended pause in car manufacturing may result in increased prices.
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