New-car stock shortages to continue into 2023 as semiconductor crisis deepens – report

New-car delivery delays are tipped to continue well into 2023, according to a new report out of the US – citing vehicle production forecasts from the around the world.

The delays are being caused by the ongoing global semiconductor shortage, which is forcing factories to slow or stop assembly lines as they wait for essential components to arrive.

Combined with the ongoing global COVID-19 pandemic – which has increased employee absenteeism at car factories – supply of new motor vehicles is expected to remain constrained for at least another year, say experts. 

The sentiment is backed up by reduced production capacity by some of the world’s biggest automakers, including Ford and Toyota.

Toyota last week announced it will produce 150,000 fewer new cars in February 2022, to 700,000, with about half of that decline occurring in Japanese factories.

This comes after Toyota forecast a loss in production of 65,000 vehicles in January 2022.

Lexus is also affected, with the LC, LS, IS, RC NX and LX set for a haircut in production.

While pandemic-related absenteeism is partly to blame, a low supply of semiconductors – an essential ingredient in new-car manufacturing, given most modern motor vehicles are equipped with between 300 and 3000 tiny computer chips – is still the major cause for delays. 

This comes as tech giant Intel announced the construction of a new $US20 billion semiconductor factory in the US, helped by the $US52 billion CHIPS act from the White House.

This act – championed by US President Joe Biden – looks to boost US domestic semiconductor production, and reduce reliance on importing them from other countries.  

“Most semiconductors today are sourced overseas,”  Intel CEO Pat Gelsinger told US media. 

“As a country, we cannot rely solely on imports for such essential technology. And the only way to address this economic and security risk is to increase our domestic semiconductor manufacturing capacity.”

However, this announcement (and others like it) will only help semiconductor supply over the longer term view.

Sam Fiorani – vice president of global vehicle forecasting for AutoForecast Solutions – told Automotive News USA: “New chip factory capacity is being built. But it will be two or three years before it has an impact on supply.”

Experts say it takes about 18 months to build a new semiconductor factory from scratch, and each one costs between $US7 billion and $US15 billion. The environments semiconductors are produced in are said to be 100 times cleaner than a hospital operating theatre.

This means supply shortages of the crucial electronic components for new cars are slated to continue throughout 2022, and well into next year.