HUNTSVILLE, Ala. — The price has gone up on things like a morning cup of joe or a used car. You're going to be paying a couple extra bucks to get what you want nowadays.
This inflation is due to supply chain issues, and one of the items in short supply is microchips.
You can't turn on the news anymore without hearing about another shortage - a shortage of workers, avocados, crude oil - but there's one thing in particular that the tech and automotive industry are missing out on...microchips...and it's causing a wave in both...
If you drive by any new car lot, things are better right there are more cars on the lot but it is not 2020, it is not 2019 - where there's cars as far as the eye can see. You'll actually notice car dealerships are being very clever and trying to quadruple parked cars over four places so that the lot looks more full."
And you may be wondering how we got here.
U.S. car manufacturers delayed their chip orders in 2020 because they thought a recession was coming from the pandemic and then they were actually in the back of the line because of all the remote work that had occurred meant that all those devices that people were buying to work from home, whether that be laptops or computer monitors or anything like that, those had chips in them and so car manufacturers were essentially at the back of the line. so there's orders which meant that new car orders were really delayed.
This poses an issue. If Americans wanted a new car, they'd have to wait...
American consumers, we expect when we buy a car we get to drive it off a lot, that's like our you know god given right as a buyer of a new car, but the issue was manufactures are like 'we can get you within 30 to 60 days' and that was you know, for most of us offensive. So, what ended up happening is that Americans consumers then turn to used cars.
But due to this demand to buy a new car and drive it off the lot, the price of used cars, which you can drive off the lot. has increased. If you want to buy a used car right now, you're gonna pay a premium for it.
Because why would someone sell a used car at its depreciated price when they could sell it at a high price in this current market due to this shortage of microchips?