How Is the Global Chip Shortage Affecting the Auto Industry?
Did you know there is a chip shortage going on in the auto industry? The Texas freeze, Taiwanese drought and a fire at a Japanese factory have all factored into this global shortage. No automaker is being spared. Ford, Chevrolet and Tesla are slowing production and finding new ways to build their vehicles. Even European automakers like BMW, Volkswagen and Daimler have suffered production setbacks. What does this mean for you?
The auto technicians at Kirberg Motors want to keep you up-to-date about auto industry news that could affect you. So, we have made a list of how these shortages may affect our customers.
How the Auto Industry Chip Shortage Will Affect You
The first thing to recognize is that this chip shortage is worldwide. Automakers try to prevent supply shortages by buying their parts from different suppliers. This was a good strategy in theory, but many of those suppliers get their parts from the same factories. When recent natural disasters struck those factories, the entire supply chain collapsed. Now, consumers are going to have to face the following fallout.
1. New Car Shortage
As we mentioned earlier, manufacturers got hit hard by the shortage. By May, General Motors had cut 278,000 units. Ford slashed its entire global production by 50%. Manufacturers are producing fewer vehicles, and some of those vehicles have fewer features. Display screens, wireless chargers, advanced gas management systems and even navigation systems are being left out of freshly built cars. This shortage has also resulted in higher prices for new cars.
2. Higher Used Car Prices
As the shortage affects the supply of new cars, consumers are buying used cars instead. This means demand for used cars has actually skyrocketed, and so too has the price of a used vehicle. Some car models have even appreciated in value recently. This means the used car industry is currently a seller’s market.
3. Parts Delays
Let’s say your car navigation system breaks down or a screen stops working. You need to get that part of your car either fixed or replaced. However, if that part requires a chip to function, it may be hard to find. Parts that previously only took days to receive may now take weeks or months to get. The cost of these parts could also go up, depending on who is selling them.
Rely on Your Local San Mateo County Auto Repair Shop
This chip shortage could last all the way into 2022. That means new and used vehicle prices could continue to rise. Keeping your current vehicle running may be your only option to avoid the high prices of the chip shortage. Our experienced technicians can help keep your vehicle on the road for longer. If you are having car problems, or you need to get your vehicle serviced, schedule an appointment with us.