What’s With the Price of PTVs? What You and Your Local Dealer are Experiencing and Why
In the world of golf cars and small vehicles in general we are seeing a year without precedent. COVID, and the aftermath of supply shortages throughout the supply chain, as well as increased demand have brought us to the point we are now: PTV prices are much higher and there are significant lags in delivery times.
Supply chain congestion
Let’s look at the shortage situation on the supply side first. If you have been frustrated in your attempts to buy a new PTV, even at prices quite a bit higher than last year, or cannot get your vehicle fixed, the reason is very simple: Neither vehicles nor parts for them are available. It is not because your local dealer has suddenly gone fishing or on an extended cruise around the world.
Getting behind the non-availability issue, what we find is unprecedented supply chain congestion at ports of origination, insufficient sea-going cargo space, congestion at the port of destination, and an overtaxed intermodal supply system involving trucks, trains, and warehouses. Supply shortages are hardly limited to the golf car industry. Many, if not most, U.S. based industries and distribution systems have been under significant stress.
With regard to the golf car industry, it shares a situation similar across many U.S. industries, which is a dependence on Chinese suppliers. When last year most Chinese factories shut down in the face of the COVID-19 infections, supply obviously was reduced. As factories re-opened, in last half of 2020 and early 2021, the rush of golf car-related output to China’s ports found Chinese industry across the board doing the same thing. Envision a sale at Macy’s on Black Friday or the day after Christmas only on a macro scale
What this revealed was a global supply system so tightly wound that what is seemingly a small disruption in shipping, warehousing, or intermodal transportation has huge repercussions throughout the supply chain. And why was it so tightly wound? Because being tightly wound under normal conditions means greater efficiency and lower cost—a so-called lean distribution system and just-in-time inventories.
Examples of the ripple effect
On March 23 of this year the Ever Given, a massive container vessel ran aground in the Suez Canal. It blocked the passage of all other vessels for only six days, as salvage and engineering crews in an around-the-clock effort were able to free the vessel and unblock the passage. Only six days, yet the enormous ports in Norther Europe, Antwerp and Rotterdam were overwhelmed by delays and disruptions for months afterward.
The photo seen here gives you an idea of the size of the ship, as a construction-sized backhoe attempts to dig out the massive keel of the Ever Given. While the ship is obviously huge, it is but one of thousands of container vessels that plie the seas bringing you your appliance, woodworking tools, the car part needed to fix your automobile, and that golf car part or accessory you desperately need.
More recently in just this past week, one worker testing positive for the Delta variant caused Chinese officials to close down a key terminal at the Port of Ningbo, the world’s third busiest port. A reports from CNBC stated:
“China has shut down a key terminal at its Ningbo-Zhoushan port, the third busiest port in the world, after one worker was found to be infected by Covid — a move that will likely put further pressure on already stretched supply networks.
“It was the second time this year that the country suspended operations at one of its key ports.
“Dawn Tiura, CEO of Sourcing Industry Group — an association for the sourcing and procurement industry, said China’s stance will lead to ‘severe” supply chain consequences.’”
Thus, global supply chain experts are waving a red flag (pardon the expression) with respect to future disruptions out of China. America is paying big time for its over-dependence on Chinese-sourced products, and golf car manufacturers and parts suppliers are no exception, for sure.
Demand-side problems and opportunities
If there is congestion and turbulence on the supply side, the demand side of the market also presents issues for dealers and for you in other ways:
- Your neighbors around the country have suddenly developed a liking for PTVs. In other words there is new demand at each and every price point. As a result, what you could buy at $8,500 a year ago is now about 50% higher or around the $12,00+ mark;
- So, as supply tightens and demand increases, your dealer finds a way to determine who wants the product most, and that is reflected in a price increase. Econ 101;
For dealers the opportunity is to reinvest better profits in his or her facility and improve repair and maintenance services. It is also an opportunity, perhaps born of necessity, to bring on more brands and not simply rely on the Big Three for timely supplies and delivery.
New PTV brands and models are cropping up at your local dealer in the wake of shortages from the Big Three. Go to www.smallvehicleresource.com and make detailed comparisons of these new brands versus what you are used to and may be more familiar with.
In a survey I recently conducted for a client, I found that dealers were bringing on Tomberlin, Icon, Evolution, and Star vehicles because they were available and were quality products. By the way, you can go to the Small Vehicle Resource website, www.smallvehicleresource.com, and make detailed comparisons of all brands and models you might be considering.
Return to Normal in 2022?
A few years ago at dinner, a gentleman, finding out that among other things I taught economics, and frustrated with long-winded explanations of what was happening in the economy at the time, bluntly asked me, “In ten words just tell me where the economy is going.” I responded, “I don’t know, and that’s only three words.”
My answer to the question in the heading above would be the same. On the other hand, what I do know is that the next 12-18 months can be characterized as a period of high risk. Supply chain disruptions, rising prices, and a scary global political environment unfortunately provide a universe of risk factors that we will have to deal with.
All this to say that owning a high-performing, dependable, and well-accessorized PTV may well be a good, risk-mitigating investment—and cost-effective, as well.
Contact the Author: Steve Metzger at email@example.com. Or check out our website at www.smallvehicleresource.com, where you will find an extensive database of vehicle models and can make side-by-side comparisons of vehicles based on a full set of specifications.