Shopping for a new vehicle? Why the semiconductor chip shortage is making certain models hard to find

Click to play video: 'Consumer Matters: Computer chip shortage affects new car supply'
Consumer Matters: Computer chip shortage affects new car supply
Global's Consumer Matters reporter Anne Drewa tells us how a shortage of computer chips is creating a shortage of new cars – Jun 17, 2021

If you’re shopping for a new set of wheels, a specific vehicle model may be hard to find, especially if it’s a truck or SUV.

Automakers around the world have been forced to halt or slow down production thanks to a global shortage of semiconductor chips.

Semiconductor chips are used to power a variety of vehicle features, from power steering and backup cameras to emergency braking systems. Right now, car dealer lots are facing low inventory as they patiently wait for chips to arrive.

“Normally, we would have 225 to 250 pickup trucks stocked at all times because we have both Chevrolet and GMC brands, and there’s been many times in the last six months we’ve been down to three or four,” said Peter Heppner, owner of the Preston Chevrolet Buick GMC Cadillac dealership in Langley, B.C.

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Auto plant closures during the pandemic, fire at a major chip supplier factory and the jump in demand for electronic devices have all fueled the chip shortage.

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According to Statistics Canada, the Canadian auto industry has been impacted by the shortage since January, but worsened in April as every major auto manufacturer had to stop or slow down production.

“In some cases, it’s meant manufacturers are building vehicles without the chips, storing them on site until they are able to resolve that issue. Some manufacturers are postponing the introduction of models,” said Blair Qualey, president of the New Car Dealers Association of BC.

Depending on the type of model, some consumers have been forced to wait months, even up to a year for the vehicle of their choice.

“It’s a perfect storm. We haven’t seen shortages like this since the 1980s,” said George Iny, president of the non-profit Automobile Protection Association.

When it comes to pricing, Iny said car makers are quietly slipping in price increases.

“We are not seeing the same level of cash rebates as we did. However, I believe there will be much more inflationary pressure going forward because of the limited supply.”

The reduced supply is also driving people to the used car market where inventory is also low and prices extra high.

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“Used cars are like real estate right now. There are cars that are selling for grossly higher amounts – 25, 30 per cent, 40 per cent more than they would have sold at the same time a year and a half ago.”

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While trucks and SUVs continue to be in high demand, you’re in luck if your vehicle of choice is a mid-sized sedan.

“If you want a used Camry or a Hyundai Sonata, those prices did not come up that much because that’s a segment of the market that is in decline and is not going anywhere,” Iny said.

This may also be a good time to sell an old vehicle.

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“Even if it’s a piece of junk on four flat tires, the price of scrap cars has gone up. So you could get $500 for your old heap of metal. Someone will want it if it has the original catalytic converter.”

Iny said he expects to see an improvement in the supply of semiconductor chips in December, with normal levels hopefully returning by next spring.

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