Chip shortage significantly impacts car lot stock across Tri-State
OWENSBORO, Ky. (WFIE) - People may notice fewer rides to pick from on local lots.
The auto industry is facing a global shortage of semiconductor computer chips, which are needed to engineer vehicles. It is the same piece of technology that is found in items like tablets.
During the COVID-19 pandemic, some auto production stopped. As people stayed home, demand for tech exploded.
“They wanted to definitely meet the demands of the computer and phone makers and kind of left the car market out in the cold,” Don Moore Automotive Owner-Operator John Moore explained.
The U.S. needs to address an ongoing shortage of semiconductors by investing in its chip “infrastructure,” President Joe Biden said during a virtual summit meeting with auto executives and other business leaders in April.
There is vehicle inventory, but it’s not in car lots. It’s sitting in production lines waiting for the chip.
This creates an issue for the customer.
Stock, overall, is down about half at Don Moore lots in western Kentucky.
“At any given time, at the least, we would have 25 Chevy pickups on the lot,” Moore calculated. “Right now, we have three or four.”
Moore says demand was off the charts in February into March, and it continues to sit slightly above average now.
“I would say at least half of the vehicles are sold before they even hit the lot,” Moore stated.
Finding new vehicles is the challenge, but they won’t cost you much more than normal. Shoppers should expect to pay more for used vehicles, which Moore estimates to be up by about 15% to 20%.
“When ’19 models price went up, that really backed up the price all the way back because the difference to a ’17, ’16, ’15 and all the way down the line,” Moore shared. “Every vehicle just became worth more money.”
The tight inventory means your trade in is looking better than ever before.
“If I’m just purchasing a pre-owned vehicle, that is the market that is the toughest and hardest on the person is the way I would put it,” Moore added.
Moore says there is a good chance customers won’t see as big of end-of-year rebates because there won’t be as many vehicles to move.
14 News also spoke with several other car lots across the Tri-State.
Leaders at each of those say they see similar issues with the supply chain.
It may be months before this industry is less impacted.
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