Another Semiconductor Shortage Is On The Cards – And The Reason Is Delta

You know that feeling when you are hoping for something to happen, and it does not. Unfortunately, it is exactly what happened with automobile enthusiasts. They were hoping that the shortage of computer chips that had sent automotive prices soaring would be gone. But it did not happen.

This did not happen primarily because we live in a global village. This world is so interconnected that the surge in delta variant in the core Asian countries harmed the automobile industry worldwide. This situation led to a delay in the normalisation process. According to a press release from the Associated Press, the overall impact of this situation was the supply of vehicles to artificially low numbers.

To put it in a nutshell, the woes of automobile consumers and enthusiasts will continue into 2023 undoubtedly.

“It appears it’s going to get a little tougher before it gets easier,” said Glenn Mears. The individual has 4 dealerships in Canton, Ohio. The slump in the industry that came as a result of the heightened prices saw motor giants such as Ford and General Motors declare the closure of various factories in North America for up to 14 days. Toyota is also set to face the brunt of it, it managed to evade closure in 2021, but production losses are on the cards from October onwards.

The chip shortage has also affected Nissan, which is struggling to close its factory at Smrna, Tenessee. Initially, it was planned to be closed till 30 Aug, but now it would remain closed till 13 Sep 21. Honda will also be lowering the number of shipments it makes owing to the chip shortage.

“This is a fluid situation that is impacting the entire industry’s global supply chain, and we are adjusting production as necessary,” said Honda Spokesperson Chris Abbruzzese in the release.

These shortages are directly proportional to the price hike. The average new vehicle sales reaching more than $41,000 in August — a record and nearly $8,200 more than the average price just two years ago, estimated J.D. Power. With the shortage nowhere near its end, automakers are directing their pool of chips into SUVs and expensive models, ensuring a better sales average.

COVID 19 has had different effects on different businesses. The unconventional ones like Elon’s Space X and Jeff Bezos’s Amazon venture have allowed them to grow exponentially. But the conventional businesses like the automotive industry, nothing can be said with certainty that when would things get back to normal.

Leave a Reply

Your email address will not be published. Required fields are marked *