Microchip Shortage Slows Vehicle Production, Car Inventory Running Short
MINNEAPOLIS (WCCO) - If you're looking at buying a new car this spring, you may have fewer options to choose from.
A shortage of computer chips is slowing down production for many vehicles.
"Inventory has been extremely short," said Joshua Burrs, who owns The Car Buying Center in St. Louis Park.
Burrs specializes in used cars, searching nationwide for different makes, models, and collectibles. He's seen demand rise while supply runs short.
"We are selling cars for more now than we were two years ago," he said.
As people get their tax refunds, this is typically the time of year when consumers are looking to buy vehicles. But some Twin Cities dealerships say their lots are only 20% full right now.
Demand for a tiny microchip is to blame. They are found in many modern devices including cars. COVID-19 has created a global chip shortage forcing some car and truck manufacturers to reduce production or put it on hold. Chevy Trailblazers and Ford F-150's are among dozens of models that have been impacted.
"With plants being shut down, materials, just like the housing market, lumber and steel prices are up. Commodities in general are up. As they go up the cost to manufacture new is going up as well," said Burrs.
For consumers, that could mean getting stuck in car buying traffic and potentially paying more to get what they want. Burrs recommends being a vigilant buyer.
"If you got a car that has the right miles and it's the right car, buy it. Because they are selling. The prices don't seem to make any sort of sense right now," said Burrs.
Seventy-five percent of the world's microchips are manufactured in Asia.
It is estimated that the chip supply shortage could run into 2022.
