Are cars still in short supply 2022?

2023 Automotive Chip Shortage Update

Shortages have dominated the news of the last three years, and the semiconductor shortage remains one of the most severe and far-reaching. The automotive industry, especially, has taken a blow from the ongoing chip shortage, with 4.4 million fewer cars produced in 2022. Automobiles’ increasingly sophisticated capabilities and connectivity have meant improved experiences for drivers and passengers alike, but they also mean that automakers are dependent on semiconductors and other electronic components that are in direly short supply.

The resulting automotive chip shortage has had a huge impact and will continue, with many industry experts forecasting that we won’t see relief until at least the end of 2023. The last two years have brought setbacks like vehicle production shutdowns at major automotive plants, however, some analysts are optimistic that the chip shortage will ease off this year based on increased production numbers. In the United States, the government is working to expand semiconductor manufacturing, passing the CHIPS and Science Act of 2022 in August that will encourage new chip manufacturing to in the US. However, this is a fix for the long term – not the present moment, in which automobile prices are high and many automakers are paring down nonessential features like screens, wireless charging features, and even navigation systems from their builds.

How Distributors Help Alleviate Automotive Chip Shortages

The dilemma automakers – and manufacturers across a broad swath of other industries – are facing highlights key vulnerabilities in the semiconductor and electronic-component supply chains. While traditional sourcing methods can serve in placid times, partnering with a trusted open-market distributor is a safety net that will provide vital adaptability in uncertain times and more flexible, beneficial options in calm ones.

Incisive market intelligence and targeted data collection and analysis are at the heart of effective independent distribution. The entire open-market business model relies on knowing and tracking who across the global marketplace has what product – or needs it. Making a place in your supplier base for a trusted, third-party-certified independent distributor means that you will be working with a partner whose business is solving global manufacturers’ unique challenges.

Within the auto sphere, this support manifests most keenly as dynamic shortage-sourcing support that can anticipate and help you navigate any disruption situation to remain agile no matter what the market brings. While Smith has been an expert at aiding our partners during shortages since our 1984 founding, our offerings extend beyond this to offer options for multifaceted procurement support like product lifecycle management and cost savings. We can also aid our global partners in getting ahead of disruptions by working closely with them to develop proactive inventory-management models tailored to their needs that can safeguard against future market shifts and upheavals.

Through all of this, quality remains essential – especially with the increased counterfeiting risk shortages bring. Modern vehicles are fine-tuned systems engineered to function precisely and protect everyone on the road with ever-evolving capabilities and features. Smith’s best-in-class, global quality laboratories verify the functionality and authenticity of the car chips and other components that enable these functions to the most rigorous standards.

“Automotive tech will continue growing smarter, more capable, and more connected – creating further demand for semiconductors and electronic components along the way,” said Cleat Kimbrough, Smith’s Vice President, EMEA. “Smith will be there for the auto industry as a comprehensive distribution partner to help them keep moving through any evolution or market situation.”

Editor’s Note: This post was originally published in October 2021 and has been revamped and updated for accuracy and comprehensiveness.

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The Chip Shortage Means 2.2M Fewer Cars This Year So Far

Experts believe that number will soar to over 3 million by the end of the year.

by Rob Stumpf | PUBLISHED Jun 13, 2022 10:13 AM EDT

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We’re nearly halfway through 2022 and the global microchip shortage—as expected—is still wreaking havoc on car manufacturing. Dealer lots are seemingly empty, new car prices are very much being padded by «market adjustments,» and hot new models like the Ford F-150 Lightning, Bronco, and Maverick are seldom to be seen. Now, Automotive News reports that these issues have resulted in millions of cars never going into production.

An ongoing industry tally from AutoForecast Solutions (AFS) calculates that the industry is now short more than 2.2 million cars worldwide for the year thus far. This new figure represents an uptick of more than 10 percent from the group’s previous year-to-date tally and is a rather grim outlook of what new car buying looks like for the rest of the year.

via Getty Images

The majority of the cuts estimated by AFS are from North American assembly plants. Around 88 percent (or 205,200 units) of the 234,200 vehicles added to the tally are cars and trucks that were set to be assembled in North America but have instead reached the cutting room floor rather than a dealer’s lot. This brings the total estimated year-to-date shortage of North American-produced vehicles to 780,800 units.

While North American numbers aren’t looking great for the year, it actually isn’t the hardest hit area in the world. That unfortunate award goes to Europe, which has an estimated production loss of 794,100 vehicles. An additional 107,300 units in China have also fallen victim to the microchip shortage, as have 437,900 in the rest of Asia, 98,200 in South America, plus an additional 12,000 units in the Middle East and Africa.

While 2,230,400 total units have already been cut across the globe so far this year, AFS predicts that the total accumulation will rise to 3,040,861. That may seem like a lot (and it is), but it also signals a bit of a silver lining: the auto industry may now be past the worst of it.

AFS’ future predictions note that an additional 810,461 vehicles will fall victim to the microchip shortage this year—that’s a hike of around 36 percent compared to the number of units already lost in 2022 thus far. However, it’s important to point out that the year is almost halfway over which means product availability should start to see an improvement as shortages ease. This echoes the sentiment made by Ford CEO Jim Farley earlier this year, indicating a potential easing of parts shortages in the second half of 2022.

The largest unknown is whether or not improved availability will help cut down on outrageous car prices anytime soon. While availability does look to improve, there is still a rather large shortage to be recognized that may not improve until 2023 or beyond.

Got a tip or question for the author? Contact them directly: rob@thedrive.com