Main shortages & issues car manufacturers are facing in 2022

If you’ve tried to buy a new car in the last couple of years, then you’ll have certainly felt the impact of shortages and issues that car manufacturers are facing in 2022.  

But what exactly are car manufacturers short of, what issues are they facing, and what does that mean for you and your new car? Let’s explore!

• #1 Semi-conductor shortage 

  One of the biggest shortages the automotive industry faced in 2021 was semiconductor chips. It’s a shortage that is keenly felt by manufacturers and consumers well into 2022. 

  So, what is a semiconductor chip, and why is it so important to the manufacturing of vehicles? 

  Whilst tiny, these chips pack a mean punch, calibrating a car’s fuel injection, running infotainment systems (touchscreens, button panels, and audio systems), as well as providing the brains behind cruise control.  

  This small but mighty chip has brought auto assembly lines to their knees across the world, with Ford and Volkswagen being the most affected. In fact, Ford cut production at eight of its North American factories in 2021 due to the scarcity of this all-important component.  

  The Ford Fiesta was one of the most affected models, so much so that it fell from the top 10 of best-selling cars in Europe – the first time in 30 years that Ford haven’t made the list.  

  Alternatives to the popular Ford Fiesta include the Toyota Yaris, the Nissan Juke, and the Vauxhall Corsa.  

• #2 Sharp price increase in petrol & diesel 

  It’s no secret that fuel prices have reached eye-watering levels. Sticking £20 in the tank no longer stretches as far as it used to, and that’s a fact that’s not been lost on car manufacturers.  

  The cost of the vehicle is not the only factor that you, the consumer, considers when looking to buy a new car. The upkeep and day-to-day running of the car is also an important factor. Just as low fuel prices make the appeal of owning a car much more attractive, high fuel prices will make you take a step back and reconsider your options when looking at the purchase of a new vehicle. 

  Perhaps you’ve decided to stick with your current vehicle, or you compromise with a new used car instead of a factory new vehicle. Whatever your decision, it’s clear that increased petrol and diesel prices have influenced consumer behaviour and thus affected car manufacturers. 

• #3 Increase in Raw Material Costs Makes EVs Expensive

  With fuel prices so high, naturally many people have begun to consider electric vehicles (EVs). The problem? An increase in raw material costs means EVs are even more expensive now. In fact, raw material costs doubled during the pandemic, led by materials like cobalt, nickel and lithium which are all essential for the production of batteries.  

  Pair this with a 10% rise in vehicle costs in general since 2021, and car manufacturers have a tricky situation on their hands. 

  Naturally, this cost trickles through to the consumer, increasing EV prices and leaving you to decide between a new petrol or diesel vehicle with high fuel costs and lower initial investment, or a higher initial investment but lower day-to-day costs.

• #4 What does this mean for you, the consumer

  It’s not all doom and gloom, we promise. Whilst industry experts warn of shortages into 2023, and the situation certainly won’t resolve itself any time soon, manufacturers are taking steps to mitigate issues and get back on the road as soon as possible.  

  Many manufacturers have made significant deals with large electronics manufacturers in a bid to secure a consistent stream of semiconductors, and EV prices are already starting to fall following the pandemic, predicted to equalise with petrol and diesel vehicles between 2025 and 2027.