reported that the rate of car sales was higher than the national inventory. Industry experts predict that consumers might have to endure the effects of the tight supply throughout 2021.
The news cited the shortage in resupply, coupled with a buildup in demand during the pandemic, as the reason for the high sales margins. Additionally, the boosted demand was attributed to the exponential economic recovery, high savings, low-interest rates, and government stimulus as factors that have boosted demand.
But as the supply of semiconductor chips continues to dip, car sales are steadily going down due to disrupted production. That has significantly impacted demand, with many car shoppers waiting until the supply steadies up to consider making a purchase.
indicated that about half of consumers wanting to purchase a car are willing to wait until the global computer chip-controller crisis clears up. The consumer perception about the industry's status quo, impacted by the high prices and low supply, has also led to the drastic dive in demand.
The study determined that 48% of in-market consumers have considered pushing forward their purchases due to the chip shortage. Those who were adamant about purchasing cars said they'll have to review their plans to ensure they buy a car sooner.
Among the sample population, 25% said they would switch brands, 19% considered buying a car from another vehicle category, while 18% think of purchasing a used car instead of a brand-new one.
on imported cars is usually more expensive. Such factors influence many consumers to now consider purchasing locally manufactured vehicles to alleviate the financial stress.
Despite the chip crisis, some improvements are taking place. "Soon, the auto market will show recovery, and car prices and supply fall back to normality, though it may not match pre-pandemic levels," said Ford CEO Jim Farley.
The major challenge is tied down to TSMC, the automotive industry's primary chip supplier, based in Taiwan. However, the company is now focused on revamping microcontroller production to offset the shortage.
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Carlos has a BA in Media Production and Marketing from Loyola University of Chicago, as well as almost 5 years of content editing and writing experience. He has operated his own freelance creative studio over the past 5 years and aspires to be a Creative Director for an Creative Agency. He is currently located in Chicago, IL and enjoys creating digital art and taking bike rides along the lakefront during his free time!