How might the shortage of semi-conductor chips affect my car order?
It’s possible you may have heard about the global chip crisis that has hit businesses such as Samsung and Apple. However, it may not have been made incredibly clear that this shortage is also having a detrimental effect on vehicle production.
But why? You may be asking, is this the case? Why are companies like Ford, Jaguar Land Rover and Nissan now struggling?
Manufacturers of everything from mobile phones, games consoles, TVs and cars have made it known that there is a shortage of semiconductor chips, something that Sony and Microsoft announced when they experienced problems with the supply of their incredibly popular new consoles. The issues started at the start of the Coronavirus pandemic when many factories, the vast majority of which are in China, had to shut down in order to prevent the further spread of the virus. As with a large number of items, this has now caused a shortage of supplies and with demand increasing now that things are on the slow to return to normal, it’s set to get even worse.
Why is this affecting car manufacturing?
Semiconductor chips are the brain of a car, in fact, they’re the brain of all electronic devices. Therefore a shortage is disastrous when it comes to meeting current demand.
The biggest issue that is facing manufacturers when it comes to sourcing these chips is that, when carmakers closed down production last year, they no longer had a requirement for the chips and when they started to work again they were moved to the back of the priority line when it came to their suppliers.
Despite being big business, when it comes to the purchase of semiconductor chips, car manufacturers are actually rather small in comparison with businesses like Apple and Samsung. In total over 433 billion dollars worth of product are manufactured every year and the car industry purchases less than 9% of this a year. So bigger customers have taken priority and carmakers are now in a situation where they have to wait.
What does that mean for you?
In order to ensure that they are not running out of the supplies needed to produce their vehicles, many factories are changing the way that they work. Jaguar Land Rover is calling a temporary halt to production at two of their plants in the UK, affecting production of the following models:
- Jaguar XE
- Jaguar XF
- Jaguar F-Type models
- Range Rover
- Range Rover Evoque
- Land Rover Discovery Sport
Volkswagen is also reducing production, which means that some models they produce will experience limited availability for a period of time.
Meanwhile, Stellantis – owners of the Vauxhall, Peugeot, Jeep, Citroen, Fiat, Abarth and Alfa Romeo brands – will be fitting some Peugeot models with the old-style digital speedometers.
The industry is unsure of how long this shortage will continue. However, there is no denying that it has had an impact and as demand continues to rise and supply remains static, things are being forced to change.
What should you do?
As demand continues to rise, and car manufacturers start announcing more shortages and some reduce their working shifts or close factories to production for brief periods of time, one thing is clear. If you are looking for a vehicle now, or know that your current vehicle is up for renewal in the next few months, contact us now.
The sooner you decide on your new vehicle, the sooner we can place your order. Waiting lists are growing and as we predicted early last year when factories first closed at the start of the pandemic, demand has started to outstrip supply and the earlier you order the less likely it is that you will be affected by the semiconductor chip shortage.
