So, what is the newest in the auto industry news? As you might be aware, there is a car chip shortage in the production industry.
It has been a factor everywhere in the world, with the United States being no exception. In 2022, there are an average of about 1.75 million cars produced each month.
With that in mind, people may be wondering if this is still a good time to buy a car. How does this affect the vehicle supply chain?
Let’s take a closer look.
Fewer Cars Globally
This is not just a problem in the United States, but rather the whole world. According to this report, the start of the war between Russia and Ukraine earlier this year did not help.
As soon as the war started, it was predicted that about five million fewer cars would get produced across the globe. There were an anticipated 82 million cars made. With that in mind, it is looking like a 6% decline in the predicted cars produced.
That means that there are likely going to be fewer cars available. With the war, it is also making it harder for car chips to get produced as well.
Chip Forecasts
So, how does the above affect chip production for 2023? Well, this report suggests that the forecasts for certain car companies are already anticipated to be lower than expected.
Let’s use Toyota as an example. Before last month, they expected to have nearly 10 million car chips ready to be distributed.
Now, that is expected to be much lower. Chipmakers are also seeing the brunt of the low supply. Some mentioned in the above report have reported that their quarterly earnings are lower than expected for this exact reason.
Rise in Car Price?
The main question is how will this chip shortage impact the average price of a car. A simple answer is that the price increase should not slow down.
Chip shortages have been an issue since the pandemic began in 2020. With that in mind, the average price of a car has risen exponentially.
Let’s take a look at the average price of a new car. In 2020, this price was just under $37,000. At the beginning of 2022, this went up to over $47,000!
An increase in that short amount of time is unprecedented. However, this also happened in the used car market.
There, the average used car was under $20,000 in 2020 and it is up to over $28,000 at the beginning of 2022. What this means is that it could only go higher in 2023 with the continued shortage.
See the Newest in the Auto Industry News
This is the newest in the auto industry news that you should be aware of if you have any interest in buying a car. A chip shortage is expected to continue in 2023, meaning that the price of a car is likely to keep going up as well.
Do you want to buy a car before that happens? Message us with your car questions today.
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