It’ll be much easier to buy the car you want in 2023 as automakers put the chip shortage in the rearview
- Automakers built 4 million fewer cars in 2022 than they would have due to the chip shortage.
- That’s down from 11 million vehicles lost the year before.
- The waning chip shortage could be a good sign for today’s car-buyers.
Weary car-buyers may stand to benefit from the waning impact of the chip shortage on today’s vehicle inventory.
Towards the end of December, it appeared as though the chip shortage was going to have a lesser impact on 2022 than it did the year before.
The chip shortage forced automakers to prioritize only their money-making models and slash valuable features, which shrunk dealership inventory levels, and drove up the prices of new and used vehicles. The easing of the shortage could mean shoppers don’t have to pay so much for limited choices.
Sure enough, in 2022, automakers built 1.62 million fewer vehicles than expected in North America because of the chip shortage, per an AutoForecast Solutions estimate. That’s about half of the 3.25 million fewer vehicles built in the region in 2021.
Further, the impact of the chip shortage globally substantially declined from 2021 to 2022.
Across the globe, automakers built about 4.38 million fewer cars last year, down from 11 million vehicles impacted world-wide the year before, according to AutoForecast Solutions.
This is not to say that losses will not happen to some extent in 2023, AutoForecast cautions — but car-buyers may see some respite from the past few years’ inventory and selection issues.
More new vehicle inventory could mean lower prices and more vehicle options than buyers had in 2021 and 2022.
While older and less techy cars used more antiquated, less profitable chips, EVs and vehicles with more advanced driver-assistance systems require more complex ones, which chip suppliers are eager to make. But pricing and supply combined stand to be bottlenecks for these types of cars.
The expected number of chips coming online still might not be able to accommodate all the EVs automakers anticipate will hit the roads.
“Even with an expected tripling of wafer supply over the next ~2 years,” the Deutsche Bank note said, total chip production “would still only be able to support a single-digit million number of EVs per year.”
More chip capacity will be required going into the second half of the decade.
Meanwhile, on the advanced driver-assistance side, “Our industry conversations suggest another year of pricing tailwinds,” the note added, “which combined with additional capacity could drive another strong year for the Auto Semi market.”
Demand means pricing will go up for automakers, and while that stands to benefit chip companies, the impacts may trickle down to consumers.