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Chip Shortage Affects Local Car Dealerships

You may have heard a thing or two about a "chip shortage."

No, not the barbecue kind. We're talking a lack of chips that's roasting certain businesses like the auto industry.

CBS 2 Morning Insider Lauren Victory takes us inside the local impact of a global problem.

Drive by Hennessy's River View Ford in Oswego and you might just do a double take. Customer Tim Peterson did.

"When you look at the lot, it's kind of surprising and shocking," said Peterson.

The dealership's inventory is zapped. Cars and trucks are strategically placed to make the lot look less empty, owner John Hennessey tells us. But "the glass is half full" for him because the supply is much better than a few weeks ago.

Right now, the lot is stocked with about 20 new vehicles compared to a mere five or six earlier in the month.

You can see the effect in the showroom where collectors' cars from the 1990's are on display instead of the latest and greatest. It's a way to fill up the area and spark conversation. The creative tweaks are necessary because of the global chip shortage slowing down the production of cars and other products.

"If we don't have new vehicles to sell and somebody wants a new vehicle, they're not going to trade in their vehicle. So, the used car market dropped volume-wise too," said Hennessey.

"Consumer Reports" estimates as many as 8 million vehicles will not get produced this year because of chip manufacturing issues.

"So, what do you do? It's stuff that's out of our control," said Hennessey adding that he's grateful for the patience of his customers and thankful to work with Ford because

The auto giant, like other brands, is increasingly selling made-to-order vehicles.

Customers are able to hand-select features online with upfront pricing.

"You literally select the color you want, the wheels you want," said general manager Jack Daniels demonstrating the technology. "It's that simple."

The hitch - you'll have to wait for delivery which is eight to 10 weeks for most models but up to six months for people like Peterson who ordered newer styles (the Mach-E and Bronco). A $1,000 incentive from Ford eases some of the wait.

"I've come for an oil change or a new battery and I've walked out with a new car," said Peterson, a self-proclaimed impulse buyer. "I've never ordered a car before and I was wondering if that's going to be the way of the future."

It's looking that way at least for a chunk of sales at Hennessey's with pre-sold vehicles making up an estimated 40 to 50 percent of shipments coming in these days.

The Chicago Automobile Trade Association assures us that that empty lot is not an outlier. Many of the 400-plus dealerships it represents are facing inventory issues with several embracing some sort of online made-to-order system.

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