Update: saw the results of a recent study that says the new car chip shortage isn’t going away any time soon.
Here is the latest prediction in production shortfalls due to lack of chips:
2021: 10M
2022: 8M
2023: 4M
2024: 1M
Return to normal in 2025.
If that is true, they there will not be a cliff in car prices in 2022![/quote]
A lot of car companies are already reducing the available options that can be ordered with the car. BMW already scrapped a few higher end trims.
It should be clarified by “part shortage” this isn’t your run of the mill mechanical part that’s in short supply. It’s electronics and chips.
There is not really a mechanical parts shortage, especially for manufacturers that use common interchange parts.
The issue is that new cars are built with so much electronics gizmos now, it’s hard to make a car complete without all those bells and whistles…
Common interchange parts have not really gone up in price because there’s so many manufacturers of them.
Maybe it’s time to go back to basics…
Don’t think used car prices are going to fall off the cliff. Maybe it will stabilize but the issue is two folds.
New car parts shortage means that both retail and car rentals can’t get the cars they need. So car rentals are still poaching the pre-owned markets…
Also, for manufacturers like GM and Ford, they are starting to shift their manufacturing strategy and move away from making those bare bone cars that typically car rental companies like to buy (stripped cars). They figured that because of the supply constraint, people are willing to pay for cars more fully optioned and selling less of the bare bone cars they lose money on. Finally…. it took long enough…
