MADISON, S.D. (AP) - Prostrollo’s All-American Auto Mall in Madison has one car on the showroom floor. In the sales lot, vehicles are parallel parked along the perimeter.
Nick Prostrollo, whose family has been selling cars for three generations, just laughs at the way the COVID-19 pandemic has turned the industry upside down. In the past, car manufacturers were pushing dealers to increase their inventory. Now, dealers can’t get what they need to fill their lots.
“We’re down probably 175 vehicles. That’s a lot of inventory,” Prostrollo said.
What they can get is a bit of a hodge-podge — small SUVs, but not large SUVs; Jeeps, but not pickups. He has customers ordering pickups now to ensure they will get the vehicle they need to meet their needs — and then they have to wait.
“On average, when we order a vehicle, we’re telling people it will take six months. Sometimes it’s nine months; sometimes it’s three months,” Prostrollo indicated.
In the past, customers ordered because they wanted specific features and didn’t want to pay for others they didn’t want. The special-order vehicles were just a portion of the new vehicles rolling onto the lot. That’s no longer true.
“The bulk of our business now is order-outs,” Prostrollo said.
Watching the pandemic affect his business has been a bit like watching a winter blizzard move into the region. It was going to happen, and they could do nothing but ride out the storm, the Madison Daily Leader reported.
“What else are you going to do? You play the cards you’re dealt and push forward,” Prostrollo said.
One advantage to being part of a family business which has been around for three generations is having weathered storms in the past. Prostrollo said his dad Pat started selling vehicles in the 1980s when interest rates were 18% and sales was a tough job. The auto industry was hit hard again in ’08, when two of the three manufacturers with which they deal needed bailouts.
“There have been a lot of obstacles, a lot of issues to overcome,” he noted. The pandemic has been just one more obstacle for them to surmount.
In the early days of the pandemic, when urban areas were hit hardest, auto manufacturers shut down for three months. That made the first dent in Prostrollo’s inventory.
“They’re not making cars, but we’re still selling cars,” Prostrollo recalled.
When production began, the pace at which cars were produced was limited not only by the scaled-back schedule manufacturers implemented but also by the shortage of parts. Plant closures overseas affected what was available in the states.
“If they can’t get the parts, they can’t build the cars,” Prostrollo explained.
Even school closures affected the auto industry. Students learning remotely needed electronic devices like laptops and Chromebooks to participate in classes and complete their assignments. This was a boon for those manufacturers.
“The electronics industry bought up all the semiconductors,” Prostollo said. “Now they don’t have the semiconductors to produce the vehicles.”
A single vehicle may have between 150 and 200 semiconductors, he said, making that shortage significant to the automotive industry. Making matters worse, a fire at the Renesas semiconductor chip plant in Japan earlier this month could increase the global shortage.
“That’s what’s now driving the lack of inventory,” Prostrollo explained. “There’s a high demand for new vehicles and there’s no supply.”
The service division has also seen a slowdown because fewer people are bringing in vehicles for routine maintenance because they aren’t commuting, but the greatest impact has been felt on the sales side. Having weathered other storms, Prostrollo’s has responded by being flexible and by continuing to make customer service their priority.
People are now ordering vehicles online, and Prostrollo’s is delivering those vehicles to buyers. This is true of both new and used cars.
“We’re sending lots of pictures, lots of videos,” Prostrollo said. “We’re being honest about the condition of the vehicle.”
By doing this, they have accommodated buyers who were hesitant about visiting the dealership, touching vehicles others might have touched or being people around people. Prostrollo’s has worked to keep both staff and customers safe by sanitizing vehicles, whether on the lot or brought in for service, but has also been willing to go the extra mile.
As a result, their sales area has expanded. With people doing more online buying, they have sold and delivered vehicles to buyers as far away as St. Louis, Missouri, and New Mexico. In the case of the New Mexico buyer, Prostollo’s had not only the desired model but also the color the buyer’s wife wanted.
“With the low inventory, people are doing what they need to do to get the vehicle they want,” Prostrollo said.
Vehicle prices have been affected by the shortage, but not significantly. Deals are less likely to be cut simply because there is always a buyer willing to pay the asking price, according to Prostrollo. Too, late model used vehicles are holding their value because of the shortage of new cars.
In general, though, he feels Prostrollo’s is weathering the storm because of customer loyalty. The family-owned business has not had to lay off any employees, despite the shortage in inventory and the slowdown in the service department.
“Customer loyalty — that’s what keeps a company in business; customer loyalty and good employees,” Prostrollo said. He attributes the loyalty to his company’s approach to doing business.
“It’s not about making a buck; it’s about building a relationship,” he stated.
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