How Does the Semi-Conductor Shortage Effect the Auto Industry

As we are now aware, COVID-19 continues to have an effect on vehicle manufacturers that are already struggling to fulfill back orders and keep up with new car demand. Now shortages on semi-conductor chips and other raw materials have impacted production plants, and manufacturers are struggling to keep up with global demand.

On top of that, other issues are now leading to higher freight prices and delays.

What is the semi-conductor shortage about?

Semi-conductors, or computer chips, are needed for everything in a new car today ranging from electric windows to infotainment screens and active driver safety systems. COVID saw a huge increase in demand for computers and other electrical devices which diverted production of them away from the automotive sector.

Vehicle manufacturers are saying that new car delivery times are expected to blow out into next year, with most major brands advising increased wait times for buyers.

Sean Hanley, Vice President - National Sales, Marketing & Regional Operations at Toyota Motor Corporation Australia?stated “Like so many, our business has also been challenged by the pandemic which has caused interruptions to global supply chains.”

“In 2021, we have seen a significant increase in demand for Toyota vehicles both here in Australia, and indeed, around the world. This, coupled with a global shortage of semi-conductors and restrictions in our South East Asia supply change due to covid, has unfortunately impacted vehicle production and local delivery times.”

Hanley went on to say that individual delivery wait times will vary by model and grade. For most of Toyota’s line-up, the wait times will be six months or less, but this is an evolving situation.

Volkswagen also addressed vehicle delivery delays “Unfortunately, industries across the world are facing stock shortages due to two significant reasons.”

“The first issue is related to a shortage of a chip called a semi-conductor that goes into most modern technology including your phone, tablet, games consoles and cars. The second, is that due to COVID-19, governments across the world have had to bring in restrictions causing temporary factory closures, setting global production further back and disrupting the global supply chain on some of your favourite Volkswagen vehicles.”

As with everything surrounding COVID-19, the situation continues to change daily, and many manufacturers are unable to provide expected delivery dates.

We are at the mercy of vehicle manufacturers and dealers.

Customers wanting new model vehicles, are urged to place their orders as soon as possible to avoid disappointment in vehicle replacement.