See all Motoring News The pace of technology is staggering, especially in the automotive world where there’s a major shift towards electric vehicles and a race to get various levels of self-driving tech into cars and on to our roads. The trouble is that technology requires semiconductors, which are microscopic components that sit inside computer chips.
Given that they are used in everything these days, you would imagine we have plenty of them, yet here we are with a global shortage and car companies from Audi to Volvo having to curtail and even suspend production due to a lack of chips. Volvo had to postpone production at its Torslanda plant in Sweden last week and recently Ford announced it was suspending production of its electric Mach-E at its plant in Mexico. Globally, the crisis could mean up to four million fewer cars are produced this year.
How did this happen? It’s all to do with straightforward supply and demand. In the midst of the pandemic, no-one was buying new cars and so the manufacturers of semiconductors shifted their supply to other customers where demand has increased, like gaming consoles and smartphones.
Now the car companies are all back and wanting their usual supply of chips, but the manufacturers of the chips are saying the automakers will have to wait their turn. When the dealership tells you that you can’t have that car right now, you might think it’s all a bit unfair, but the chip makers will say it’s just business. Some chip makers are also investing in new manufacturing facilities to meet the increasing demand, but in what might seem like a perfect storm, others have had staff shortages due to Covid and one had its output severely curtailed after a fire.
The problem is that, where a decade or so ago a car only needed one or two chips, today they need hundreds per car to control everything from the fancy touchscreen display everyone wants to the many sensors that help to keep you safe. Without the chips, the car simply does not work.
One way some automakers are getting round the problem is to take out the fancy toys like head-up displays, digital instrumentation and in-car wi-fi. If you want a basic spec car, you can probably have one tomorrow, but if you want one with all the gadgets you could be waiting a few months.
This has all lead to a number of things. It has forced buyers to look at models they were not previously considering, just to be able to get into a car now. It has also caused some to buy used, perhaps in the nearly new market, just one of a number of factors that have seen used car prices rocket.
Many in the industry expect the shortage to continue for the rest of this year, but as with so many things at the moment, hopefully we will see a return to normal in 2022.