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When Will We See More New Cars? – The Chip Shortage is Forcing Automakers to Adapt

When the rumblings of COVID-19 first began, I don’t think that anybody really knew what to expect. Even after we all kind of felt out the idea that we were going to be locked down for quite a while, still, it was hard to predict some of the fallout that would come from the life-changing circumstances.

As time would tell, the pandemic ended up impacting just about every single industry. It even ended up creating complete chaos in industries that we never expected to be impacted by the pandemic.

For example, when I tell you that everybody’s going to be locked down and people are going to spend more time at home, it would be kind of hard to link that to the automotive industry. In fact, the natural first thought would be that there would be much more supply available because the demand for cars is going down with people not needing to commute to work every day. Right?

The fact of the matter that we have found, though, is that the exact opposite has been true. Well, almost.

It’s hard to really say if demand has gone up or down but the supply has definitely plummeted. Therefore, the available inventory has shot up in value a great amount. In fact, some vehicles that were purchased new just a year or two ago can now be resold for a little bit more than the original purchase price even though they’re used!

All of this is because of a chip shortage that has been a major challenge for automakers. As the circumstances of the pandemic dictated that people use more electronics, the chips used for these electronics have taken away from the chips used for other things like vehicles.

Down in the video below, Wall Street Journal gets us up to speed, citing some of the latest data on how exactly automotive manufacturers have been changing their ways when it comes to the chip shortage. Saying something like this makes us wonder if and when a lot of the ripple effects will return to pre-covid status.