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Highlights
- Due to ongoing supply chain disruptions and semiconductor shortages, new car buyers will have to suffer more in 2022.
- Covid-19 has slowed down the demand for new vehicles since early 2020.
- Global chip shortage will likely continue in 2022, impacting car buyers and sellers.
The Covid Pandemic has changed everything, including office meetings, studies, shopping, or groceries. Everyone had to adjust to this ‘new normal’ and will keep doing until they get any other option. Meanwhile, the automotive industry is going through the same challenges facing the global semi-conductor shortage.
Although new car buyers are already cursing the ongoing semiconductor and supply chain constraints, this will continue to affect them in 2022.
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How is the demand?
The pandemic has slowed down the demand for new vehicles since early 2020, while supply chain disruptions add up to the situation. The worldwide shortage of chips, a vital component in all vehicle types, has significantly decreased the global car output, taking over big companies like Toyota. Toyota was also expected to cut its global car production by 40% as the ongoing semiconductor shortage also hit it.
This global chip shortage is likely to continue in 2022, impacting both the car buyers and sellers, as the lack of vehicle inventory has led to a massive increase in vehicle prices. On the other hand, it is difficult to conclude anything on the ongoing supply chain disruption.
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According to analysts, car dealers with lower inventory levels are more profitable as the logistic crisis has vastly impacted the complex automotive industry. As a result, the car price has jumped by 30-50%, making it a massive deal for the new car buyers.
Bottomline
Even though the situation is likely to remain imbalanced throughout the first half of FY22, hopes are still high for some improvement by July.
