Automotive Chip Shortage

You’ve probably heard about the automotive chip shortage that has been affecting vehicle manufacturers around the world, but you may be wondering what exactly the car chip shortage is and how it will affect your car buying experience. To make a complicated situation simple, most of the products we use every day have semiconductor chips to operate properly. This includes everything from your phone to your washing machine to your vehicle. During the coronavirus pandemic, the number of people that were buying entertainment devices and other appliances that used semiconductor chips grew exponentially, and the supply was unable to meet the market demand.

This intersection of events led to the automotive chip shortage you’re hearing about on the news today, and it’s affecting everything from car sales to the release of the latest technology. While the car chip shortage seems bleak, it has already shown signs of improvement. If you’re looking for a new vehicle for your Freehold commute, you can trust that DCH Kay Honda will be able to secure the vehicle you need at a price that will fit your budget. Learn more about the car chip shortage below to see how it’s affecting new and used auto supply, how long it’s expected to last, and how our team is working hard to help our customers get the new Honda vehicle they need.

Why Is There a Chip Shortage?

The chip shortage was caused by an increase in demand of products that contained semiconductor chips and the simultaneous leaden production of chips during the coronavirus pandemic. When the chip supply could no longer meet the market demand, every product that required a chip to operate either had a halt in production or had an increased price. While semiconductor chips are in many products sold in Tinton Falls stores, the automotive industry was hit the hardest by the shortage.

Part of the reason the car chip supply is suffering is due to the amount of time it takes to produce a semiconductor chip. Chips must be created in a pristine lab environment to ensure no dust or dirt can accidentally land on the chip and cause it to malfunction. Additionally, semiconductor chips are incredibly small – five-hundredths of the size of a human hair – and are extremely complicated to build. The restrictions that were implemented for the coronavirus pandemic further complicated matters, preventing semiconductor chip factories from operating at full capacity. All of these factors combined means that chip manufacturing takes a long time to complete, and until the car chip supply can meet demand again, automotive manufacturers will have to wait.

How is the Chip Shortage Affecting New & Used Vehicle Supplies?

While many industries are affected by the semiconductor chip shortage, the automotive industry is affected the most. This is because many new vehicles require hundreds of semiconductor chips to be installed to ensure their essential systems can function properly. The automotive chip shortage has led many manufacturers to suspend or limit production of their vehicles. This means that fewer new models will be available for purchase on showroom floors across the country and around the world. The shortage has also caused the price of many new vehicles that have already been produced to increase due to competing demand among dealerships and the public.

The used vehicle market has also been affected by the car chip shortage. As new vehicles become more scarce, private sellers and dealerships are searching for used vehicles to supplement their inventory. Subsequently, the cost of used vehicles has gone up about 20% to 30%. While this can be an obstacle to used car shoppers, drivers looking to sell their used vehicle may be offered a higher price than they would otherwise.

How Long Will the Chip Shortage Last?

While no one knows exactly when the shortage will be resolved, mass vaccinations and the relaxing of covid-19 restrictions have allowed production in many facilities to continue at their pre-pandemic levels. Still, automakers have cut their semiconductor orders significantly at the beginning of the pandemic, so chip manufacturers can’t immediately return to meeting that demand. Another aspect that causes the automotive chip shortage to still remain an issue in 2022 is that automakers need older chips, which are less profitable for semiconductor manufacturers. Naturally, automakers are more inclined to work on more orders of new chips that can earn more and that are in higher demand since the pandemic. However, as time goes on, manufacturers will be able to account for a bigger capacity and catch up with market demand, so more vehicles will find their way onto showroom floors and prices will go down.

Can I Still Buy a Car from DCH Kay Honda?

Absolutely! Whether you need a new SUV or sedan for your Red Bank commute, the team at DCH Kay Honda is working hard to ensure we have enough vehicles in our inventory to meet the needs of our customers. Browse our new or used vehicle inventory to find the right vehicle for your daily drives, then contact our finance team to arrange a time for a test drive and begin the car buying process. You can also pre-order a Honda with us if you have time to wait until your next vehicle and want to ensure that you will drive a model that you actually want!

Find a New or Used Honda at DCH Kay Honda

When you’re ready to find a new or used Honda model for your commute, trust the team at DCH Kay Honda to secure the vehicle you need at a price that will fit your budget. We offer a variety of new vehicle specials and used vehicle specials that can help you save on your purchase, and we have online tools that can value your trade-in or help you plan your monthly payments. Visit our Eatontown dealership today to get behind the wheel of a new or used Honda model!

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