Nearly manufacturers will be affected by the chip shortfall.
This shortage may create peaks and valleys in deliveries in 2021.
This is an ongoing issue that began late last year and could last through the first half of 2021.
Nearly all mass-production automakers have, are, or will face issues due to severe microchip shortages. General Motors, Mazda, Volkswagen, Subaru, and Volvo, to name only these three, are in the midst of dealing with the consequences of chip manufacturers scaling back output and shifting production away from automotive last year.
Across the Globe, the shortage has forced automakers to slow or idle certain assembly lines. The chips are used in digital displays and operate safety systems. They are also used in smartphones and video game consoles. The concern is that new car demand could outpace availability due to automakers cutting down on production.
For example, GM’s production of the Chevrolet Malibu sedan, Equinox and Trax, as well as the Cadillac XT4 SUV, and others could be cut by up to 10,000 units next week alone.
While most automakers are focusing on their more profitable products, Ford has said that they will be forced to curtail F-150 production and drop two of the three shifts at one of the plants that build the truck. The other one will keep two shifts going. Essentially, 50% of F-150 output will be cut for a week starting next Monday.
What this scenario could bring is additional pressure on new and used car pricing. Wiggle room will be extremely limited due to tightening inventories. This will also have an impact on used car prices, which have already escalated substantially in the last year as reported by Automotive News. These sharp increases in pricing could mean that fewer consumers will be able to afford a new or used set of wheels this year.
Not all is gloomy however as there’s overall optimism thanks to the arrival of the COVID-19 vaccines and that the economy remains relatively strong.