Microchip shortage slowing car production

Jackson, TN. (WNBJ)-



Today's cars use plenty of microchips to run all the electronics inside... So, a shortage of microchips has led to a shortage of new cars:

Jovan Alexander (The Car Store of West Tennessee General Manger) stated, “The shortage was caused during the pandemic. Factories closed down for quite a few months and there was no production. Right now that whole industry is playing catch up.”

The shortage means higher prices for both new and used cars, that's why dealers say finding a vehicle that retains its value is more important than ever. While walking and talking with Chase Channell from Honda Victory we learned your old "hooptie" could be worth more than you think. Chase Channell (Honda Victory General Manager) informed us, “cars are depreciating assets, but right now there’s such a huge shortage that they are actually appreciating in value. If you have a car that you bought two years ago, odds are you could get what you paid two years ago.”

This appreciating value is something never seen before in the world of car buying. it's all turned into quite a struggle for many premier dealerships. Chase Channell (Honda Victory General Manager) told 39 News, “well it’s created a buyers’ market because all of the used car values have increased. We’ve had a need for new cars, but manufacturers haven’t been able to meet that demand.”

But dealerships that focus on preowned vehicles are seeing an increase in sales. Kayla Webb (American Car Center Sales Professional) stated, “right now the best place to buy vehicles are preowned dealerships. Preowned dealerships are not really seeing any shortage of inventory verses more established dealerships.”

Rick at Golden Circle Ford say though the microchip shortage did have an impact here at first, Ford is now finding ways to work around it. Rick Melugin (Golden Circle Ford Lincoln Sales Manager) stated, “one thing that fords done that has really been great is that they’re doing order units. You can order and they are making sure they go straight to the line.”

And cars are not the only manufactured goods impacted by this chip shortage. Jovan Alexander (The Car Store of West Tennessee General Manger) told 39 News, “cellphones, appliances, the semiconductor chip is a universal thing.” The car dealers we visited all agree that things will get better for both car buyers *and* car sellers, once the microchip shortage becomes a thing of the past.


Makayla Davis

mdavis@nbc39tv.com

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