Why is There a New Car Inventory Shortage?

If you’ve gone car shopping over the last two years, you probably noticed how bare the lots at new and used car dealerships seem. The COVID-19 pandemic led to a car inventory shortage that has affected dealerships and drivers throughout the country. So, what’s causing it exactly, and when will it end? Below, Sawyer Chevrolet, Inc. will take a closer look at the used and new car inventory shortages and what Hudson drivers can expect. 

What is the Automotive Chip Shortage?

There would be no car inventory shortage if weren’t for the car chip shortage, which began in 2020 with the COVID-19 pandemic. Electronic devices, including cars, require semiconductor chips to operate. Here are a few reasons why the automotive chip shortage has been so impactful and how it unfolded: 

• Supply: When the pandemic began in early 2020, many factories reduced or altogether eliminated their chip production. The demand for cars was significantly reduced during the pandemic, because of quarantine and a large-scale switch to remote work for many employees. 
• Demand: Two years later, demand is rising for cars and other devices that require semiconductor chips, but factories are struggling to get back to normal production levels. 
• Materials: Russia and Ukraine are two of the world’s major sources of neon and palladium. These two components are vital to the production of semiconductor chips. Russia’s invasion of Ukraine has greatly reduced the accessibility of these materials.

When Will the Car Inventory Shortage End?

There is no projected end date. Experts predict sometime in 2023 or 2024, but on the other hand, can’t seem to agree. One thing is certain — vehicle prices are steadily increasing and it isn’t expected to change. All that being said, it’s probably a better idea to buy a car sooner rather than later. You can also use our vehicle configurator to build your own Chevrolet vehicle from scratch, and we’ll order it for you! 

Stay Updated on the New Car Inventory Shortage

The COVID-19 pandemic left a lot of hardship and struggle in its wake. But, at Sawyer Chevrolet, Inc., our goal is to simplify the car-buying process as much as possible for our Windham and Saugerties customers. Browse our car buying tips hub for more information, or contact us online or by phone at (518) 303-2798!