DAVIE, Fla. – A tiny part is causing a huge problem in the auto industry. The parking lot at Sawgrass Ford of Sunrise used to be full of new F-150 pickup trucks. On Friday, it was mostly empty. AutoNation Toyota Weston was also low on inventory.
The global shortage of semiconductor chips has affected supply. One new vehicle with high tech can have up to 100 semiconductor chips on board. Rita Case, the chief executive officer of the Rick Case Automotive Group, said there were about 150 cars on Friday at Rick Case Volkswagen.
“We are getting inventory every day,” Rita Case said. “We are just not getting it in the same volume that we used to.”
U.S. chip supplies are vulnerable to foreign suppliers. A company in Taiwan makes 70% of the supply of semiconductor chips. Taiwan is dealing with the worst drought in half a century which prompted island-wide power cuts.
Automakers are producing fewer cars. Some manufacturers such as Tesla are changing the components of their vehicles and charging higher prices.
Our biggest challenge is supply chain, especially microcontroller chips. Never seen anything like it.— Elon Musk (@elonmusk) June 2, 2021
Fear of running out is causing every company to overorder – like the toilet paper shortage, but at epic scale.
That said, it’s obv not a long-term issue.
Richard Gonzalez, the vice president and general manager of Vera Cadillac Buick GMC, is also feeling the impact of the shortage. He said they have more than 500 vehicles on the lot. He said there are a lot of dealerships that have already run out of inventory.
“We are getting calls from all over the state and sometimes out of the state,” Gonzalez said.
Rita Case and Gonzalez said their dealerships will not be selling cars above the Manufacturer’s Suggested Retail Price or MSRP.