When there’s suboptimal vehicle availability in your local market, you could find yourself searching for a new car online.
If you looked for a new or used car at any point in 2021, you might have noticed a lack of inventory at many car lots. This issue is ongoing because of global supply chain volatility. The result is fewer options, higher prices, and more trouble finding the exact vehicle you want.
It’s fair to blame the pandemic for these supply chain issues, as low car sale numbers and COVID-related factory shutdowns in early 2020 led to a massive backlog. Manufacturers couldn’t get their hands on the necessary components. This is because it was dangerous to operate factories full of people, so they shut down production.
When life started returning to normal, at least somewhat, demand for these parts was far greater than supply, so manufacturers couldn’t immediately ramp up production.
However, consumers are adjusting to this lack of inventory by altering how they purchase vehicles. Buying cars from out-of-town or out-of-state dealerships and utilizing a car shipping service to get them home is an increasingly popular option for shoppers seeking a specific automobile.
Here’s a look at the current supply chain disruption, how it’s impacting the car industry, and what savvy shoppers can do to find the exact vehicle they want.
Key Takeaways
- Supply chain disruptions are hurting car manufacturers and buyers
- This volatility could be a long-term issue
- Buying an out-of-town car and shipping it home could become widespread
- Using an auto transport broker ensures you get the best deal
What is causing the supply chain issues?
Early in the pandemic, the demand for mobile computing devices and superfast internet was incredibly high. People were working from home at unprecedented rates. This is because these goods and services were relied on to keep the economy functioning.
Mobile phones, tablets, computers, video game systems, and many other electronic items rely on semiconductor chips to operate. Modern automobiles use the same technology, and this double demand is causing a shortage of these chips worldwide.
Many car buyers might not realize it, but every vehicle in production today uses semiconductors. These devices are responsible for powering items like driver-assistance features, infotainment systems, heated seats, and heated steering wheels, so there’s no avoiding them.
Their demand will only increase in the coming years as vehicles become more complex. This is because consumers are seeking more features and greater convenience.
For a short time, car manufacturers weren’t ordering these chips because they couldn’t invite workers back to their factories. This is because they generally don’t store a surplus of inventory. Then, when they tried to re-open their factories, the semiconductor shortage made it impossible to increase production to catch up with demand.
The result is the situation we’re in today, as semiconductor manufacturers haven’t caught up with the market. Because of this shortfall, car manufacturers are still behind on production, making it more challenging for consumers to find specific makes and models.
How long could these car manufacturing disruptions last?
There’s no telling how long the semiconductor shortage will hinder global vehicle production.
The president of America’s operations and global vehicle forecasting at LMC Automotive, Jeff Schuster, believes semiconductor production could return to pre-pandemic levels sometime in 2022. However, LMC Automotive’s official projections suggest we could be well into 2023 by the time production recovers.
In the meantime, Toyota estimates they’ll experience a production reduction of 25,000 to 30,000 vehicles in February 2022.
Toyota isn’t alone in the losses brought about by this shortage either. Ford believes it lost out on 1.25 million vehicle sales in 2021. Also, Volkswagen missed its production goals by 1.15 million.
Vehicles with certain features, such as heated seats and steering wheels, could be more challenging to come by in 2022, too, as General Motors dropped these features on specific models. As a result, consumers might not find the features they want on popular vehicles like the Chevy Silverado, GMC Canyon, Buick Encore GX, and Cadillac XT4, to name a few.
The semiconductor shortage isn’t permanent, but it could remain an issue throughout 2022 and into 2023.
The solution to Supply Chain Disruption
Unfortunately, there’s no quick solution to the global semiconductor shortage because there’s so much demand and not nearly enough products.
We could see domestic companies begin producing these chips in the future. This will especially happen if the shortage extends into its third year. But that solution isn’t instant and won’t immediately influence production.
From a consumer standpoint, looking for vehicles in other jurisdictions makes sense when searching for a car with certain features. Online shopping makes it easy to search for the car, truck, or SUV you want in neighboring communities before traveling to finalize the purchase.
Some dealerships will even hold the vehicle for you with a deposit. This is so that you don’t end up traveling only to realize the car has sold before you arrive.
It’s possible to arrange the remote purchase of a vehicle, too, and use a car shipping carrier to deliver it to you. Nonetheless, there is some risk involved when going this route. Therefore, you’ll be buying the vehicle sight unseen as this allows you to extend your search zone.
If you’re looking for a particular vehicle with specific features, buy from an out-of-town or out-of-state dealership. Additionally, hiring an auto transport carrier could be your only option as this supply chain disruption continues.
Using a car shipping broker
Naturally, the vehicle shipping carrier you utilize should have all the necessary insurance to ensure your new car makes it to you in good shape. You’ll also want the best possible service at a price point you find acceptable.
Mercury Auto Transport is a car shipping broker that can put you in touch with carriers to handle your job. We’ll only present you with offers from FMCSA-licensed carriers with the necessary insurance. This is to provide you with safe vehicle transport when you need it. Contact Mercury Auto Transport today to learn more or receive your free quote.
