When Rachel Caspar began buying a new car in August, her heart was set on the Ford Escape plug-in hybrid. The problem is that Ford did not produce many of them this year due to a shortage of computer chips, which has reduced vehicle production worldwide.
Mrs. Casper first vacated her home state of Michigan and then neighboring states. As she stretched to the east coast, she spotted one – 537 miles from Hanover, Pa.
“I flew to Baltimore, took a lift to the dealer and then went home,” said Ms Casper, who owns a water-sports equipment retailer. “It was so adventurous.”
The shortage of computer chips, caused by decisions made in the early days of the epidemic, has plagued the automotive industry this year. Manufacturers were forced to close factories due to a lack of spare parts, leaving car dealers selling millions of vehicles.
As a result, car buyers had to travel hundreds of miles to find the vehicles they needed, abandon bargaining, accept higher prices, and even pick up used cars repaired after serious accidents.
The supply pressure corresponds to the apparent increase in demand. Some try to avoid mass transit or taxis. Others simply prefer a vehicle. Many families have saved thousands of dollars due to government benefits and incentives, and have been stranded due to health concerns as they spent less on travel, restaurant food and other luxury items.
The end of this year is generally the best-selling season, with some automakers running ads promising cars as gifts with giant bows. But this year consumers have found that finding the car of their desires is not quick, easy or cheap.
Ed Madovsic, a wine industry executive in Napa, California, decided to switch to the German electric car Porsche Daekon as the Tesla Model S lease neared its end. He ordered one, but it would not arrive until May, three months after he had to drop Tesla.
He plans to rent cars until Taekwondo arrives and looks at the bright side. “It’s a different world now, so it doesn’t really matter what I was waiting for,” he said. “I’ve been thinking about renting a pickup for a week so I can finally get rid of my garage.”
The disruption in car production has plagued the automotive world. In the spring and summer of 2020, rental car companies stopped buying new cars and sold many of their vehicles to survive the travel ban. Now those companies are trying to take advantage of the hot rental market and buy cars, often competing with consumers and dealers.
All the big discounts and incentives that were once standard features of car buying in the US are gone. Instead, some dealers now add an extra $ 2,000 or $ 3,000 to the list price for new cars. This has annoyed car buyers, but dealers who raise prices know that if one customer bans, another usually waits and is ready.
In November, the average price of a new car was $ 45,872, up from $ 39,984 a year earlier, according to auto-data provider Edmunds. The average price paid for a used car, which was $ 22,679 in 2020, is now more than $ 29,000, and Edmonds expects it to cross $ 30,000 next year for the first time.
As the prices of used cars go up, some consumers spend a lot of time repairing old vehicles and keeping them for a long time. Cars damaged in accidents are repaired and sent to the scrap yard instead of being declared a total loss by the insurer.
“The math has changed over whether a car is a whole,” said Peter Telangchamps, senior vice president of Group 1 Automotive, a Houston – based auto retailer. “Our parts and service business is very special. We see more cars being adjusted based on higher used values.
In the spring of 2020, when automakers shut down factories for weeks and cut orders for computer chips and other parts, chip shortages in the automotive sector began to occur from the onset of the epidemic. At the same time, home-grown consumers were taking laptops, game consoles and other electronics, prompting manufacturers of those devices to increase orders for semiconductors. When automakers resumed production, they found that chip suppliers had lower productivity.
As a result, automakers have produced significantly fewer trucks and cars this year than they planned. With the closure of factories, vehicles have been developed without certain features such as heated seats and electronics that increase fuel economy. Tesla dropped the Lower-Pack support on the passenger seat of some models.
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Low production has limited sales of new vehicles this year. The Edmunds industry expects to sell about 15 million light trucks and cars, down from the 17 million that was considered a benchmark in the years before the epidemic. It expects to reach 15.2 million vehicles by 2022.
Car makers have said the supply of chips has improved in recent months, but executives expect parts to be a problem for much of next year.
Some automakers are testing new strategies to ensure a steady supply of chips in the future. Ford Motor Co., in partnership with Globalfounders, which operates semiconductor plants, said it was developing chips specifically for Ford vehicles and looking for ways to increase chip production in the United States.
General Motors has teamed up with chip makers to develop three basic chips that can handle most of its needs. The company expects to increase supply while significantly reducing costs.
“We see the chip problem continue to run until ’22,” Ford’s chief financial officer John Lawler told analysts at a conference call in October. “We do everything we can to get as many chips as we can.”
That is, consumers are going to do long-distance shopping by paying the full price for new cars.
For some car buyers, the market is very rich.
Tom Maledick, a retired medical sales executive in New Orleans, recently began buying a two- or three-year-old Ford EcoSport small sports utility vehicle. He hoped to find one for less than 20,000 miles for $ 15,000, and earlier that year he paid his wife for an EcoSport. “But it’s 17, 18, 19, 21,000 dollars,” he said. “They were five, six years old, and they had a lot of miles on them.”
Eventually, he flew to Michigan to retrieve the 2015 Ford Escape he had given to his son, and drove it 1,100 miles to New Orleans.