The Effect of the Microchip Shortage on the Automotive Industry
This is a guest blog from guest author, Matthew McHugh.
If you are looking to buy a car, now is not the time. Due to many factory shutdowns during the global pandemic, the automotive industry has been struggling to meet demand making it nearly impossible to find an affordably priced vehicle. The chip shortage has halted the production of new vehicles and cost the global automotive industry over $210 billion dollars in 2021. These shortages are expected to roll into 2022 and will not be resolved until 2023. Toyota, one of the largest car manufacturers in the world, indicated that it has cut production by 80,000 units per month. BMW has looking into removing certain features to keep up with demand. For example, the company has indicated that it will remove the touchscreen and replace it with a manual controller as depicted to the right. It will also remove the back up assistant for some of its 2022 models and provide a $500 credit as recompense for a loss of features.
If in the market to buy a car, consumer reports recommend three different courses of action:
1. If your current vehicle has mechanical problems, the cost of getting it fixed would be less than purchasing a new or used vehicle.
2. Because car prices have skyrocketed, consider a different model that may better meet your price specifications.
3. Wait for the microchip shortage to be resolved in the next 1-2 years to perhaps get a better deal or purchase a vehicle with your desired specifications.
Has the chip shortage impacted your search for a new car? Let us know down below in the comments or DM us on our social media.