Car Dealerships Warned Supply Shortage Could Last Well Into 2024
The new vehicle shortage is likely to last well into 2024, according to car dealerships, industry analysts and other experts familiar with the automotive supply chain.
Sam Fiorani, vice-president of global vehicle forecasting at AutoForecast Solutions, recently told Automotive News Canada that it will be “well into next year, if not 2024,” before inventory levels return to a regular level. Semiconductor chips are the main culprit behind the crunch, but Fiorani said there’s also a shortage of other parts, too, including plastic and foam components that are made from petroleum, leaving automakers and car dealerships with little immediate reprieve.
GM has been able to keep its plants running by pulling certain electronic features from vehicles, such as heated and cooled seats and heated steering wheels, among more. This has only helped so much, though, as dealerships are still finding full-size pickups and SUVs, as well as compact crossovers and other popular vehicle types, hard to come by. The manager of one Buick–GMC car dealership in Ontario told Automotive News Canada they have customers that will be waiting up to a year for their new truck to arrive.
U.S. Commerce Secretary Gina Raimondo met with the CEOs of chipmakers and other industry executives during a trip to Korea in May. She said the executives all agreed that it will be “deep into 2023, possibly early [2024] before we see any real relief,” in the global chip supply.
“I do not unfortunately see the chip shortage abating in any meaningful way anytime in the next year,” Raimondo said.
The US Senate passed an amended version of the America COMPETES Act in a 68-28 vote in May, which would sideline more than $50 billion to support U.S. semiconductor production, although it has not yet been signed into law by President Biden. GM CEO Mary Barra and other auto industry executives sent a letter to Congress this month urging it to pass the federal funding, saying the auto industry “is facing substantial production losses stemming from capacity challenges across the global semiconductor supply chain.”
SOURCE: GM AUTHORITY