This is a technology article from 'The Weekend Australian'...

This is a technology article from 'The Weekend Australian' discussing the worldwide shortage of computer chips.

Below are the paragraphs most relevant to car retailers:

"...The next wave in the fourth quarter last year was when car makers began running out of chips. This coincided with factories and assembly lines lowering spending and slowing production due to COVID-19.

Mr Lee said car makers used older-style chips, and had underestimated car sales due to the pandemic. They had lowered their inventory of chips in early 2020 and foundry capacity was booked by other industries.

Peter Griffin, spokesman for the Federal Chamber of Automotive Industries, said most modern new cars used between 50 and 200 chips with hybrid and electric cars requiring up to 3500.

Instead of an expected decline, there was increased demand for cars in Australia for trips away and by those seeking to avoid public transport. “Transport and hygiene have driven the demand in vehicle markets and new cars and used cars,” he said.

He said a combination of fewer chips, fewer cars and a bigger demand exacerbated the shortage. Purchasers could be waiting up to eight months for delivery, depending on the car. The second hand car market also saw an increased demand and price increases.

Mr Griffin said there was now indications of new car sales improving. FCAI March quarter new car sales figures were 268,538 (2019), 233,361 (2020) and 263,648 (2021).

This showed a 30,000 increase in 2021 compared to 2020, and sales in 2021 being not far behind 2019 figures so far.

“The market is recovering but there is demand and there will be delays and each of the car makers are managing it according to their own market profile,” Mr Griffin said.

NRMA spokesman Peter Khoury said the chip shortage had also impacted the rental car market. NRMA-owned Thrifty Car Rental found it hard to buy cars as had other car rental firms. There had been an increase in consumers hiring cars for road trips.

However, the international automotive crisis is far from over, with car makers halting or reducing production. In the US this has impacted Toyota, Honda, General Motors, Ford and Fiat Chrysler while in Asia, manufacturers such as with Hyundai, Kia, Toyota, and Renault Samsung have recently warned of cutbacks. Cutbacks are also expected in China-based car production...."