LAKE CITY – Terry Corrigan knows a little more about the auto industry as the owner of Classic Chevrolet in Lake City and he’s absolutely convinced that the semiconductor chip shortage is impacting his business and others like it.
Corrigan said that regardless of the make or model of the vehicle, the impact is universal when it comes to scarcity. He also said General Motors had tried to prioritize pickup trucks and full-size SUVs, but the chip shortage still impacted the number of vehicles that could be produced.
He said Company 101 will tell you when there are supply issues, it ultimately impacts pricing. That said, Corrigan said his dealership is doing everything possible to keep prices low for customers.
“Life is still going on. That’s what cars are made for. There could be a myriad of different life events (which caused someone to buy a vehicle). Sometimes it’s a bumper, families get bigger or smaller, ”he said.
“The seasons are coming and people need four-wheel drive. We need to make sure we have something available for them.
He said his dealership has a fair amount of used vehicles in the field, but as the chip shortage continues, these vehicles and their market will continue to shrink as there are fewer and fewer new vehicles. to buy.
Although issues with the chip shortage are still causing supply shortages, Corrigan said he believed the auto industry had started to drain the water and “the ship has started to recover, but it is ‘is a slow process “.
“General Motors has done a fantastic job finding what they need to run the factories,” he said. “I can’t even imagine what it would be like to work in manufacturing right now. “
Michigan U.S. Senators Gary Peters, Debbie Stabenow and Ohio Senator Sherrod Brown last week urged the Taiwanese government to continue working to alleviate the current semiconductor chip shortage that has plagued U.S. automakers. , slowing down factories and leading to layoffs for workers throughout the auto industry supply chain. In a letter from senators to Taiwan’s representative in the United States, Bi-Khim Hsiao, senators thanked Taiwan for working to address the global chip shortage, while stressing that further steps can be taken to increase the production of fleas.
“These factories are absolutely essential to our state economies, employing tens of thousands of our constituents and supporting a critical supply base that magnifies their importance up to tenfold,” the letter said. “In what should be good news for our country’s economic recovery, demand for vehicles – from cars to commercial trucks – is now on the rise, but the lack of semiconductor chips is preventing this renewed demand from being met. At a time when our manufacturers are expected to add extra shifts, they have had to shut down their American factories or cut production.
“… We appreciate your efforts to deal with the shortage and hope that you will continue to work with your government and your foundries to do all you can to mitigate the risks facing our state economies.”
Last week, Nissan announced that its massive Smyrna, Tennessee plant would shut down for two weeks starting August 16 due to a computer chip shortage caused by a coronavirus outbreak in Malaysia.
The shutdown is one of the longest for a U.S. auto plant of this size since the semiconductor shortage, which has hampered auto production around the world, began to hit late last year.
Few US factories have been closed for two consecutive weeks, and these are typically factories that make smaller, less profitable vehicles, like sedans. The automakers have tried to keep the chips for the factories that make their best sellers, primarily SUVs and pickup trucks. But pickup truck factories have also been closed sporadically, including three recently closed General Motors factories.
With COVID-19 outbreaks continuing throughout the semiconductor supply chain in Asia and other regions, supply issues may last even longer than that, according to Guidehouse Research lead analyst Sam Abuelsamid.
The shortage and plant closures, coupled with strong consumer demand in the United States, have caused shortages of new vehicles across the country. This drove up prices and the shortage spilled over into the used vehicle market.
The chip shortage is starting to improve, but the delta variant of the coronavirus is starting to cause problems at factories in the semiconductor supply chain, making matters worse, said Phil Amsrud, senior senior analyst for IHS Markit who studies the flea market.
Big chip foundries in Taiwan and elsewhere in Asia take large wafers of silicon and turn them into several smaller integrated circuits. They are then shipped to ‘back end’ manufacturers in Malaysia where they are cut into chips which are used in automotive control computers.
But epidemics among workers at those factories and in the shipping industry are again affecting supplies, as evidenced by Nissan’s shutdown, Amsrud said. Also, the chips that automakers are getting now may not be the right ones for the products they want to build in the future, he said.
In addition, many countries that do the background work like Malaysia have low vaccination rates, Amsrud noted.
The Associated Press contributed to this report.