When Will the Vehicle Supply Chain Recover?

September 16th, 2022 by

Did you know that the world supply of semiconductors is mainly manufactured in Taiwan?

Global tension and the recent pandemic have put the car supply chain 2022 in a state of flux. As a result, many wonder how the industry will recover from the current issues.

This blog post will discuss the factors affecting the automotive industry and why they matter. Keep reading to find out!

Automotive Supply Chain News: An Overview of Recent Events

The COVID pandemic put a wrench in many operations, from carmakers to suppliers. The car supply chain was no exception.

In fact, the pandemic exacerbated existing problems in the automotive industry. These problems included:

  • Reliance on China for parts and assembly
  • Long lead times for new car models
  • Lack of flexibility in the supply chain

These issues have led to a decrease in production and an increase in car prices. In addition, the pandemic has created a new set of challenges for the automotive industry. These include:

  • A decrease in consumer demand
  • A shortage of semiconductors
  • Shipping delays

Many consumers are now looking to purchase used vehicles, as new ones are rapidly increasing in price.

Main New Car Supply Chain Issues: What’s Happening Right Now

Currently, there are two main issues affecting the car supply chain. The first is the semiconductor shortage. This shortage is a result of the pandemic.

Many factories in China and Taiwan, where a large portion of semiconductors is made, were closed during the height of the pandemic. Productions were at a standstill for many months, resulting in backorders and major shortages in well-known car companies such as:

  • Toyota
  • Ford
  • GMC

The second issue is the increase in material costs, mainly due to other world events, including the ongoing war in Ukraine. As well as increasing tensions between China, Taiwan, and NATO are affecting the supply chain.

Since the car supply chain is a global enterprise, disruptions have ripple effects felt noticeable in every corner of the world.

When Will the Auto Supply Chain Be Back to Normal: A Look Into the Future

The car supply chain 2022 is currently in a state of flux. However, some factors suggest it will recover. These include:

  • An increase in electric vehicle production
  • A shift to local production
  • An increase in semiconductor production

These factors will help mitigate the current issues’ effects and allow the automotive industry to return to a state of growth.

In fact, President Biden recently signed the CHIPS and Science Act, providing US companies with billions of dollars over the next five years.

This will put a dent into the car supply chain 2022 worries and help the industry return to normal.

The car supply chain is a complex system that is constantly changing. The recent pandemic has highlighted some of the weaknesses in the system. However, many factors suggest the car supply chain will recover. With the right policies in place, the automotive industry can return to a state of growth.

Car Supply Chain in 2022: A Better Future

What do you think about the car supply chain in 2022? Share your thoughts in the comments below.

Are you looking to purchase a vehicle in the near future? Then, check out our inventory today!

Posted in Car Industry News