Global chip shortage continues to affect car manufacturers

Earlier this year, the global chip shortage looked like it might start to ease. But it now looks like that isn't going to happen any time soon.

It isn't all bad news. The global chip shortage hasn't affected the leasing industry nearly as much as it's affected the new and used car market. 

Factory lead times are significantly longer and, there's a noticeable lack of in stock vehicles - we usually have up to 8 pages of in stock vehicles. We now have 3. To help with the stock problem, we've marked pipeline stock as 'In Stock Soon' to give our customers a wider choice of cars that can be delivered quickly. These pipeline stock cars have already been built and are on their way to the UK. Ordering a car that is pipeline stock/in stock soon is still a great way to avoid the factory order wait times. 

Fortunately for us, many of our customers come to us to order their car from the factory. Whereas buyers of new and used cars often expect to drive their new car away with a few days. Some dealerships have seen their sales decrease from 100 sales per month to as little as 20.

What to expect in the future?

The short answer is nobody knows. No matter how much you search google, you won't find a solid answer anywhere.

There are a few ways this could play out:

  1. Manufacturers continue building cars without the chips and, when the chip shortage stop, they add the chips to the cars and, we'll see a massive influx in stock cars.
  2. The semiconductor factories catch up with the demand over time and, we slowly but surely see a return to normal over the next six to twelve months.
  3. Coronavirus continues to close factories and, the shortage continues - although this scenario seems unlikely.

How much has the shortage cost?

It's difficult to find information on how much each company has been affected but, we can see by our stock levels and lead times that Volkswagen is one of the worst affected.

The chip shortage has resulted in Europe's two biggest car manufacturers Volkswagen and Stellantis losing a combined 1.4million vehicles in production. While we can't put an exact figure on that number in terms of money lost, we can expect it to be at least in the hundreds of millions.

It isn't just car manufacturers that are being affected by the computer chip shortage. Apple CEO Tim Cook told CNBC that supply chain constraints had a clear impact on Apple's financial results. The chip shortage has reportedly cost Apple so far $6 billion. You may have noticed as well that the new Playstation 5 and Xbox Series X are near impossible to get your hands on.