New car delayed? Semiconductor chip shortage could finally be ending

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Car buyers waiting on deliveries of new vehicles could have some good news on the horizon according to Autocar. That’s because the much-publicised semiconductor chip shortage that has plagued the industry could be set to ease by the end of 2022.

The shortage caused manufacturers to have to prioritise certain models, delay production and in some cases even close plants down altogether.

Tesla CEO Elon Musk said: “Last year, we spent a lot of engineering and management resources solving supply-chain issues, rewriting code, changing our chips, reducing the number of chips we need.

“It was chip-drama central.”

But now there may be signs that the crisis could be easing somewhat.

Analyst company LMC automotive says that the deficit in the number of cars unable to be manufactured due to the crisis will be halved this year to 4.8million, from 9.6million in 2021 as car-makers start to get their hands on the chips.

Although LMC managing director Pete Kelly said: “Demand is still outstripping supply, and that’s particularly acute in mature markets [like Europe and the US].”

LMC estimated that the worst-hit manufacturer last year was Ford, which it claims lost 1.2million units sold due to the shortage.

The pain wasn’t felt in all areas of the industry however – luxury car sales were up by record levels in 2021.

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Rolls Royce for instance delivered 5,586 cars globally, which represents a 49 percent increase over the previous year.

That figure is the highest annual sales figure Rolls-Royce has achieved during its 117-year history.

And Mercedes-Benz declared their cars more profitable than ever after it increased prices amidst a swell in demand.

But in general the automotive industry has not coped well, pushing demand for used cars sky-high and used prices rocketing 30 percent.

At the start of the year, Toyota, which targets building nine million new vehicles in 2022, had to close down five plants temporarily.

The Japanese company said that the factory closures wouldn’t affect total production, but would impact around 20,000 new cars.

It also reduced the number of cars it will make in North America to 50,000.

Both Toyota and Honda also had to close factories in Japan due to a surge in the Omicron variant.

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