Inventory of new vehicles hampered by global chip shortage


GRAND RAPIDS, Mich. (WOOD) — That new car you have been shopping around for may become even more difficult to find.

The worldwide semiconductor chip shorting continues, leaving brand new cars parked and dealer lots nearly empty.

“We have under a million units of inventory on dealer’s lots right now.” said IHS Automotive Analysis Mike Wall, who provides analysis to several local parts suppliers. “In a normal environment, where we’re selling 16 and a half, 17 million vehicles, we could easily have three and a half million. Maybe even close to 4 million.”

Much of the problem is due to the semiconductor chip shortage.

“Semiconductor chips are so ubiquitous throughout a vehicle. A vehicle could have around a 1,000 to 1,400 chips,” said Wall.

GM has announced they’ll idle eight plants in North America next week. Other auto makers are expected to do the same.

While they aren’t built West Michigan, a lot of the parts that go inside the idled new vehicles are.

“It doesn’t even matter if that supplier has a component that has chips in it. If the vehicle isn’t being built, at some point you’re going to be impacted.” said Wall.

He says so far, those companies have been able to adjust production schedules.

There have been slows downs, but no shut downs in West Michigan.

“So they may still pull parts and they may stock them somewhere. But you can only do that for so long. There’s only so much warehouse space,” said Wall.

As for the light at the end of the tunnel, Wall sees some improvement next year. But he thinks the effects of the shortage could linger in to 2024.

“As crazy as that sounds, just because of the sheer magnitude of the gap,” said Wall. 

He says another thing that’s kept auto suppliers up and running is the tight labor market. A lack of workers means more work for those still on the production lines.

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