Chip Shortages Vs. The Automotive Community: Who will win?

September 14, 2021

Semiconductor chips. Have you heard about them in any of your daily meetings or readings? I’m sure you have. It’s everywhere right now, especially in our world, the automotive space, even this past Sunday Night, 60 Minutes discussed it. There seems to be no escaping the reality of scarceness. Talking about it only gets us so far though, as the situation isn’t improving.

Chips aren’t the only issue in our New Vehicle supply chain as COVID is hitting Asia hard again. It’s crazy to think that as far back as May, the volumes of cars being shipped had returned to 5% shy of pre-Covid-19 levels. Since then, many automakers have been forced to shutter production lines thanks to Covid outbreaks. This has been worsened by the shortage of semiconductors. The analysts are projecting the lack of semiconductors will be responsible for about 5m cars not being built in 2021.

Even further compounding the chip issue, the conductor manufacturers are being forced to prioritize their orders. The result of this leads to them naturally feeding their largest customers like Apple and Samsung. Major publications are now asking if Semiconductors are the new oil.

This shortage won’t last forever, but it will continue for the near future and will lead to possible changes in our supply chain for years to come. For now, we need to continue to take orders on new vehicles (believe me, your customers are hearing about the chip shortage as well!!) and work with our manufacturers to secure sourcing when you can.

The unpredictable nature of the world around us will only continue. Stay positive and remember to be transparent with your customers. As inventory fluctuates, you will have to be nimble and creative in how you handle touchpoints to consumers. I for one am optimistic about the future. The automotive community is one of the best around. Stay plugged in and remember that we are all in this together.