HI there,
So i checked recent commentary from the company - little information about impacts related to chip shortages in their documents. I do however, think they must impacted to a certain degree is there is supply chain bottle necks on new vehicles. I'm sure their used-car and collison center businesses would be less impacted, but maybe getting parts could become an issue as well. However, it can also be a positive. Here is an exert from their most recent conference call in response to a question on chip shortages:
I have also spoken to some OEMs and the feedback I am getting is that inventories could get back to normal pre-pandemic in the next year, year and a half. But that’s not going to fill the void for vehicles that were lost as a result of the pandemic. And so there is probably a 2 to 3-year window of shortage of new cars. And then put on top of that a lot of a lot of used vehicles come from the rental car fleets. And rental car companies right now have virtually no vehicles for sale and probably that’s the last bucket to get filled. As production starts ramping up, you first supply retail consumers, but the last bucket to be filled will be the rental vehicles. And so there is a shortfall there. And then to couple that, to Michael’s point, there is going to be a year or so gap for vehicles that weren’t leased, because of chip shortages and supply chain issues. And so all that to say there is going to be strong demand, low supply, probably for the next 2 to 3 years and we see that as being a great opportunity to be a car dealer
Based on this, it appears that it is a net positive for companies like ACQ.
Mat