A worldwide chip shortage is a threat to everything we use, from smart phones to cars. How will it end and what does it mean to the automotive aftermarket?
Chips in the automotive industry
The disruption of automotive production last year saw many orders cancelled, the purchase of chips used in every aspect of computer-controlled technology within a vehicle was included in this. Chips are not the sole province of vehicular technology, they are required for every aspect of computer-controlled equipment, from vacuum cleaners, to smart phones – so it was of small consequence to chip manufactures as an industry that automotive demand took a dip.
Supply & Demand
As demand out strips global supply of this essential component, it is a reassuring sign of economic recovery that demand in general has increased, but as vehicle manufacturers develop tech heavy products, this will create a bottle neck for previous manufacturing methods and may delay production. Backing up other suppliers in the chain will create financial consequences and will ripple through every aspect of the sector. As product is stalled from point of production to assembly, intelligent political thinking to support product fulfilment solutions, perhaps through temporary warehousing and fiscal support, will help keep wheels in motion.
Impact on the Aftermarket
The importance of vehicle checks and regular maintenance will assist in the recovery of the economy as a whole, as well as allowing vehicle manufacturers the time they need to get the stock they need to produce new cars. There are many factors that may increase the age of the UK car parc, unavailability of new stock will be one, affordability will be another with uncertainty perhaps stalling purchasing decisions.
These could be perceived as good news for the aftermarket, with a greater share of the car parc inclined to consider an independent solution. Keeping marketing channels up to date will assist with securing motorists ready to leave the dealership network whilst they wait for stock availability for their next acquisition.
Simplicity could be the solution
Private transport is a critical enabler to keep other sectors functional, affordable private transport solutions being required by much of the key workforces relied upon during the lockdowns. Tech heavy options can already be expensive to purchase without the strain of unavailability driving up prices of existing stock. The shortage may allow for critical analysis of whether every vehicle option needs the amount of technology models carry – simpler vehicles need simpler processes to build, and they will be simpler and more affordable to repair.
