Sector car in crisis on all fronts. It has been for several months now that the “chip crunch“, Or the crisis in the production of microchip and related chips, electronic components, control units and spare parts, is bringing the global automotive industry to its knees with jobs at risk.
The real problem is i delays of months on deliveries of new cars and as we shall see but also of used cars.
Stellantis back to analog for some models, Mercedes reduces the workload to over 18 thousand employees, Jaguar and Land Rover have slowed down production processes, while Renault and Volkswagen are talking about a serious situation, so much so that they do not know how the situation will transform in the coming months. In the United States General Motors has put production on hold at some factories and Ford has halved production of the F-150 pick-up, a car that has been very successful in America.
Among the triggering causes the crisis of electronic components there is certainly the Covid-19 pandemic. During 2020, with the lockdown imposed by governments, the workers remained at home to avoid the risk of contagion. This has led companies to protect themselves and adopt alternatives to safeguard their employees. Among the best guesses, there was it smart-working, with the use of computers, tablets and all sorts of electronic devices. Each of these objects, however, had a chip inside for its correct functioning and with a mass consumption, the effect was catastrophic. In fact, the increase in demand had not been foreseen by the manufacturing companies, which immediately ran for cover. Possible cause of this? Or for the reduction of work shifts in the factories where these components are produced in the Asians and Chinese?
Delays in new car deliveries
The chip crisis has been creating many delays on deliveries of new cars to customers who have already ordered them for several months. The delay in deliveries of new cars is everyone’s problem and concerns Stellantis, the WV Group, the French of Renault, BWM, Audi, Ford, Porsche, Seat, Mazda, Honda, Toyota, etc.
Used cars impossible to find, in short supply, empty squares
This shortage of chips not only is it creating problems on new car deliveries but also on second-hand market. Official dealers and most of the independent sellers are blaming the shortage of used cars to sell, with half-empty squares. There are no used cars to buy.
L’unavailability of used items it is due to the absence of the return of used vehicles in exchanges which materializes precisely when the customer picks up a new car.
“It is not just a chip problem, there is also the availability of certain parts of the car such as speaker mounts, air vents, etc. A big problem for us too. Our main catchment area is the long-term renters who themselves can’t get the new cars. They extend the rental to customers and consequently the used car does not return to the market “ tell us Gianluca Marani, one of the owners of the Iamauto of Rome.
Crisis chips and spare parts and the race for the used car that is nowhere to be found
L’absence of new cars it has pushed more and more buyers to move towards second-hand; according to Autoscout24 the average costs of cars for sale on the site have increased by as much as + 3.1% (average price of € 17.670). Same situation in other European countries, with the Germany which in the same period recorded an increase in prices of as much as + 6.1% (average of € 22,940), followed by Belgium with + 5.7% (€ 19,630), Austria with + 4.9% (€ 22,700) e Holland with + 4.5% (€ 20,150).
“It is a phase of great change for the entire automotive sector. While manufacturers are forced to review their strategies, in the short term the attention of consumers for the second-hand market is growing, which guarantees almost immediate availability of cars and a fleet that meets all needs – says Tommaso Menegazzo, Marketing Director of AutoScout24-. An interest that could increase further also thanks to the incentives just allocated with the Sostegni-bis decree for the purchase of second-hand Euro 6 cars, against the scrapping of cars over 10 years. It is a replacement in favor of new generation, more efficient cars that can help renew the Italian fleet, historically one of the oldest in Europe. “
Problems and delays in new car deliveries, the real causes
There chip crisis it is a serious problem, so much so that car manufacturers have to slow down production on assembly lines or even partially or completely close factories. These electronic components, of which cars are increasingly invaded, are essential to complete the production of new cars but in recent months the situation is becoming almost unmanageable, manufacturers are unable to manage the growing demand, which has also arrived from other sectors. , such as that of consumer electronics and home electronics.
Chip crisis, what does it depend on? Politics between the US and China?
While the pandemic played a key role in this global crisis, it was not the only trigger; there is also the relationship United States-China. In recent years, the American power has imposed increasingly severe sanctions against their rival superpower. The main motivation of the United States was that the production of Chinese chips would have military purposes. However, due to the interconnectedness of global trade and the dependence of many nations on China for the production of affordable technology, the measure created large supply problems.
As the global chip market is increasingly dependent on Asia, while the US and other countries have tried to take matters into their own hands, they lack the manufacturing capacity to meet the high demand. With or without the pandemic, therefore, intensifying trade wars between the US and China would likely have led to the chip crisis as well.
Raw materials such as steel and plastic are also in short supply
To add to this delicate and tragic situation, there is another problem. A few days ago, theAnfia, the Italian association of the automotive industry, sounded an alarm on there is also a shortage of steel and plastics “Sia for steel, which for plastic raw materials, even though we are faced with a phenomenon that the imbalance between supply and demand already foreshadowed at the end of 2020, the proportions acquired in recent weeks, during which the lack of availability of the materials in question is dangerously lengthening the delivery times, in some cases even tripling, threatening the ability of companies to meet the final demand of customers. With consequent delays and risking to cause significant economic losses“.
If plastic is missing, there is also a problem among those who produce plastic parts for cars that often remain stationary on assembly lines due to the unavailability of other components in addition to chips.
The real cause of new car delivery delays …
But why these raw materials and electronic parts are missing? The truth is also another linked to the planning of purchases. Usually the manufacturers carry out a programming in a period of time ranging from 2/3 years up to 7 years. Then the pandemic upset everything and all the forecast volumes for 2021 were upset with a strong reduction. In fact, this year, however, there has been a significant recovery and important requests to which many component manufacturers were not ready or, let’s say it better, they had not received any orders for such volumes at all.
And this is probably precisely the reason or a product offer that is much lower than the demand for the reasons we have just mentioned.
Crisis of PC components and video cards that cannot be found at a high price
This problem is also reflected in PC components and especially on video cards that are nowhere to be found and with soaring prices. Just looking for a graphics card to buy it turns out that it is very difficult to find and with skyrocketing prices. Nowadays, performance video cards are increasingly requested by gaming enthusiasts, by those who work using editing programs for photography or video montages but above all by those who do “mining” from cryptocurrencies.
If you take a ride on AMAZON it turns out the lack of electronic product and costs almost doubled.
Dependence on electronics and semiconductors, RED alert!
Electronics and semiconductors are key components on modern cars where electronics have invaded everything from the infotainment system to car management on all aspects with many on-board control units, many connected via can bus.
With the Coronavirus pandemic, the requests for tablets, PCs, laptops and the companies producing chips and electronic components have concentrated on these which absorb almost 80% of the volumes produced against 20% of the automotive sector. The most disconcerting thing is that over 65% of the production of electronic components used in the automotive sector is in the hands of Taiwan Semiconductor Manufacturing Company.
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