Inflation Prompts Auto Price Hikes

(CBS DETROIT) -- The automotive industry is no stranger to economic woes.

The pandemic, supply issues, and rising prices are causing headaches.

"Inventory is hard to find but that's going to change," said Suburban Collection Platform General Manager Ron MacEachern.

"We're starting to see inventory starting to return to the dealership lots and now there's an expense associated with it."

MacEachern says it's more expensive to do business today compared to previous years.

"I think we're trying to be prudent about the costs that we can pass along to our customers and try to educate them on that and we're also trying to maybe, you know, absorb some of those costs ourselves to make it not such a big hit to our customer base," MacEachern explained.

The biggest challenge is keeping workers.

"Our team members are looking to be paid more money," MacEachern said.

"They're being offered more money at other locations, other industries actually, as well."

More workers are needed to get more cars on the lot.

"I think labor still remains one of the biggest challenges for a lot of the parts suppliers," MacEachern said.

"You know tier two and tier three suppliers. The chips are there now, it's just getting people to put them in the cars and getting the cars transported back out to the, you know, retail network."

And customers can expect to pay more.

"That's the shock factor that our customers are feeling right now," MacEachern said.

"It's that they come in and say hey, you know, I want that same car I bought three or two years ago and now it's $100 more a month. That's where it's really becoming apparent to the consumer saying, holy smokes, this inflation is real."

Parts and supplies are also affecting budgets with a 25% to 30%  increase.

"Pparts are more expensive," MacEachern said.

"Again, their labor, their supply, their infrastructure, they've passed along the increased costs to the dealerships. In many cases we're holding the line on our expenses trying not to pass them along to customers because we don't want to jeopardize the long-term relationships that we've developed with our customer base."

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