Understanding the Car Inventory Shortage

Chip Shortage
The current car inventory shortage is the direct result of the automotive chip shortage. More than 1,000 of these chips—AKA semiconductors—are required to build a single vehicle. At least for now, supply can’t keep up with demand. Fewer new cars are being delivered to dealerships, and those that reach Rye and Stamford are likely to be sold at higher prices.

 

 

The Origins of the Automotive Chip Shortage

So, why is there a car chip shortage? The start of the pandemic sent shockwaves through semiconductor manufacturing facilities. Stoppages and slowdowns—coupled with an increased demand for home electronics—caused automotive manufacturers to lose access to the semiconductor streams that they had previously relied on. Even now that demand for vehicles has picked back up, manufacturers are continuing to play catch-up.

To make matters worse, producers are currently having a difficult time securing neon and palladium. These two components play important roles in the production of semiconductors, and supply lines will be impacted for the foreseeable future.

When Will the New Car Inventory Shortage End?

The new car inventory shortage has already had dramatic and far-reaching effects—and since semiconductor supplies are still recovering, we don’t expect the existing trends to change any time soon. Expect the car inventory shortage to persist until 2023, 2024, or even later.

Is There an Upside to the Car Inventory Shortage?

The car inventory shortage is changing the way that dealerships from New Canaan to Greenwich do business. Although the new cars that make it onto dealership lots may have higher price tags than you’re used to seeing, many dealerships have responded by making it easier to order a car online or reserve one that hasn’t yet left the factory.

As this way of buying becomes more normal, you can expect new car inventories to get smaller and smaller; however, most dealerships will still keep a few models in stock so that they can continue to offer test drives.

It’s important to note that the car inventory shortage isn’t just impacting new vehicles. As some drivers get pushed out of the new market, more and more people are competing for existing pre-owned vehicles—and that means pre-owned cars are fetching higher prices, too.

In fact, that might actually be the biggest upside to the car inventory shortage: if you trade in your vehicle right now, you might receive a much higher return than you’d bargained for!

Find the Perfect Vehicle at Mercedes-Benz of Greenwich!

If you can’t find exactly what you’re looking for on dealership lots near Greenwich, take advantage of our vehicle finder service and let us do the legwork for you! Alternatively, you can build and price your Mercedes-Benz online and let us place your order directly with the factory. No matter which way you decide to go, we’ll let you know as soon as your chosen model arrives on our lot!

Not sure which path is right for you? Take advantage of our car buying tips and get the help that you need today.

 

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