We continue to feel the ripple effects of the coronavirus outbreak in new areas every day.
Production delays, logistics problems and falling business volumes have now been joined by raw material shortages and the chip crisis.
WHAT IS THE CHIP CRISIS?
A chip is a small electronic component made of many transistors on a silicon substrate. Chips are used in almost every electronic sector — from computers and cars to smart home appliances and phones.
Supply chain disruptions from the 2020 pandemic, surging post-lockdown demand and raw material production that could not keep pace emptied chip stocks and triggered a global crisis affecting cars, diagnostic tools, military equipment and consumer electronics.
HOW DID/WILL THE CHIP CRISIS AFFECT THE AUTOMOTIVE SECTOR?
As automakers restarted production, spare parts shortages appeared. Manufacturers had to pause or reduce production. New vehicle supply fell; used car prices may rise further as chip stocks run out despite SCT discounts.
WHICH CAR BRANDS WERE AFFECTED BY THE CHIP CRISIS?
These brands were affected in 2021. When they could not source chips they halted or reduced production, sometimes stopping specific models entirely.
- Honda
- Toyota
- Ford
- Fiat
- Tesla
- General Motors
- Volkswagen, Audi, Seat, Skoda
- Peugeot
HOW LONG WILL THE CHIP CRISIS LAST?
No one knows for certain. Credit Suisse analyst John Woods expects shortages possibly into Q2–Q3 2022. IHS Markit estimates 7.1 million fewer cars worldwide this year, with issues possibly lasting until 2023. Goldman Sachs analysts expect global OEM profits to fall by $20 billion in 2021.
CHIP CRISIS REDUCED SCT IMPACT — NEW CAR AVAILABILITY IS DECISIVE
Despite SCT reductions, production problems mean dealers have no stock, pushing buyers to the used market, said Motor Vehicle Dealers Federation President Aydın Erkoç.
"TREND SHIFTS BACK TO USED CARS AGAIN"
Despite SCT relief, new vehicle supply issues continue to drive used car price increases.
WHAT COULD RISING USED CAR PRICES LEAD TO?
The unforeseen chip crisis hurt production and pushed up used prices; ongoing shortages may increase prices further. Owners may keep vehicles longer and invest in maintenance — potentially boosting the repair sector.
IS YOUR GARAGE READY IN THESE RAW MATERIAL AND CHIP CRISIS DAYS?
The crisis affects not only vehicle production but also the automotive aftermarket. Automotive diagnostic tools rely on microprocessors that are increasingly hard to source; shortages in China may worsen supply.
Get your diagnostic tool before stock runs out and keep serving customers without interruption.
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