Important Information Regarding the Global Semiconductor Shortage and How it has Affected New Vehicles

Greetings!  We hope that you and your family are safe, healthy, and ready to enjoy some beautiful weather!  COVID has certainly affected almost every aspect of our daily lives and has created some lingering aftershocks.  Among which is a global semiconductor shortage.

You might ask, “What does a global semiconductor shortage have to do with vehicles?”, and you might be surprised to learn that the average vehicle today contains many semiconductor chips. For that matter, so does your cell phone, your Bluetooth speaker system, your wireless printer, the Alexa device in your home, and even home appliances like remote control vacuum cleaners and the newest refrigerators.  The reality is that as the pandemic caused millions of people around the globe to work from home, the demand for electronic devices grew geometrically.  The growth surprised major semiconductor manufacturing companies, who could not keep up with demand.  They are adding manufacturing capacity, but not fast enough to keep up with demand in the short-term.

This chip shortage has rippled through the auto industry at a time when inventory levels were already low due to plant shut-downs due to COVID.  So inventory levels on many popular models are near zero and the wait times on factory orders are extended.  Adding to the complexity, General Motors, along with all other auto manufacturers, is having to make decisions on how to maximize production.  Since many upscale features use a great number of chips, there are restrictions on certain features like advanced camera systems, trailering packages, and vehicle entertainment systems.

Adding to the shortage of vehicles, since there are so few new vehicles available, the normal stream of late-model trade-ins is not occurring.  And last year, General Motors corporate employees were working from home, so there are not the typical GM Executive Vehicles available for purchase and virtually all business and pleasure travel was cancelled so there are no one year old rental vehicles coming to market.  This has all combined to result in severely low inventory levels of late-model pre-owned vehicles.

So what to do?  Our team is working diligently to fulfill customer needs, but it is taking time.

As we look forward to the rest of spring and into the summer months, we wanted to share some thoughts along with our best advice to deal with the current reality surrounding vehicle availability.

First, PLAN AHEAD.  We understand this is harder to do for many customers, but the more you can plan ahead, the better.  If your current lease is due up in 4 to 6 months, its not too early to come in and place an order for your next vehicle.  If your lease ends sooner, come speak to us about options, including arranging a lease extension if needed.

Second, SEIZE THE MOMENT.  If you have an extra vehicle in your driveway, NOW is the time to consider trading or selling that vehicle.  Used vehicle values have never been stronger.

Third, remember, Karl Chevrolet is your LEASE RETURN HEADQUARTERS.  If you have a lease maturing, no matter the make, our team will be happy to assist with your vehicle return.  In some cases, we can even cut you a check for equity you may have. Ask us for details!

Lastly, BE READY TO ACT.  If you see a vehicle that meets your needs, ACT.  This is not sales jargon – it is our sincere advice to take advantage of the opportunity.  Once a vehicle is gone, it will be very hard to replace.

Finally, it appears we are going to be in chip-shortage mode for the next 12-18 months.  So stay informed and continue to plan ahead.  Those customers who have done that are being rewarded.  Our staff is here and ready to assist in any way we can.

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