Why There’s A Shortage in New Car Inventory?Aug 8th, 2022
Shopping for a new vehicle but only getting to a long waiting list for even placing the order? This has become a usual scene in the automobile industry due to the scarcity of semiconductor microchips and various other manufacturing products. The significant reason that contributes to the shortage of microchips is the global pandemic. In 2022, when COVID hit the world, automobile manufacturers assumed that the demand for new vehicles would decrease due to limited economic activities and resources. Thus, they cancelled or reduced their semiconductor microchip orders. Now, as the world is attaining normalcy, the demand for new vehicles is rising but cannot be fulfilled due to limited availability or unavailability of microchips.
Continue reading to learn how the microchip shortage affects the Canadian car market and relatively impacts the operation of a car dealership.
How is the Microchip Shortage Affect the Canadian Automobile Market?
The Canadian Vehicle Manufacturers’ Associated (CVMA) reported a nearly 50% drop in the vehicle output from two million units in 2021 to just 1.1 million units in 2022. As semiconductor microchip continues to cripple the market, leading companies like Toyota, Volkswagen and Honda are cutting their production units.
The delay in acquiring the microchips due to slow manufacturing processes and scarcity of workforce is also giving rise to the demand for pre-owned vehicles in the market. In fact, the value of used cars is more than what you expected three years ago. Committed dealerships like the Heartland Ford are working hard to meet the raging demand of the customers by maintaining a comprehensive inventory of both new and used vehicles.
When Will the Vehicle Shortage End?
With things getting a bit better at both the supply and demand chains’ end, the auto market is planning to bounce back with the new inventory. Moreover, many semiconductor microchip manufacturing plants are being set up globally to meet the demand with the necessary workforce and other vehicle-manufacturing parts. The transportation industry is also getting back on track with frequent loads to deliver the required equipment and tools within time to automakers, helping them manufacture the vehicles faster.