New-car prices in Australia are likely to remain relatively high – after a decade of sharp drive-away deals – because global vehicle production continues to be constrained by a shortage of semiconductors, which are key components for in-car infotainment systems and advanced driving aids.
Most new cars use between 50 to 200 individual microchips, while hybrid and electric cars can require up to 3500 microchips.
While the waiting time of certain in-demand new cars – such as these examples listed here – stretches from six to 12 months, most mainstream cars have delays ranging from a few weeks to a few months.
That’s because new-car sales – in Australia in particular – have recovered faster than the automotive industry had predicted after the worst of the coronavirus crisis.
In Australia, new-car sales posted their first year-on-year gains in November and December 2020 after a 31-month slump, the longest slowdown since the Global Financial Crisis.
Manufacturers of semiconductors and microchips pivoted to smartphones as car factories slowed during the COVID peak mid-way through 2020.
Now, semiconductor manufacturers are struggling to meet the resurgence in automotive demand – due to the long manufacturing process for microchips.
The bottleneck is so serious, some car makers are considering their legal options against the companies that were supposed to supply semiconductors.
German media outlet Automobilwoche reported Volkswagen “may seek compensation from Robert Bosch and Continental” after VW was “forced to reduce production in Germany because of a lack of automotive microchips”.
Automotive News Europe reported that VW had to reduce production output at factories in Wolfsburg and Emden, and a component plant in Brunswick, because of a shortage of microchips.
“Analysts said VW could have a case for winning money back from the parts makers,” Automotive News Europe reported.
“If the suppliers ordered too few chips to meet their delivery obligations, they are likely to end up sharing in the costs of the production stoppages,” analyst Frank Biller of LBBW told the industry journal.
A statement by Bosch said: “We are currently focusing on maintaining supply chains as much as possible despite a tense situation in the market.”
Ford, Mercedes and Audi are also among several car makers forced to cut production at factories in Germany.