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IPFS News Link • Transportation

Chip Shortages $450 Billion Hit to Auto Industry for 2021-2022

• by Brian Wang

This is a forecast of 15 million fewer cars being built over the next two years at an average selling price of about $30,000. An August 20021 global forecast for light vehicle production in 2021 was 80.78 million units.

The 7-9% shortage of new cars is increasing the price of used cars. Wholesale used vehicle prices (on a mix-, mileage-, and seasonally adjusted basis) increased 3.6% in the first 15 days of September compared to the month of August. This brought the Manheim Used Vehicle Value Index to 201.4, a 24.9% increase from September 2020. The global used car market size was valued at between US$0.9 trillion and US$1.4 trillion in 2020 (range of market studies).

The world has demand for 15-20 million more new cars over the next 3 years that are being met with competition for used cars. Car companies that can overcome the problems to build more new cars will have a large opening to greatly expand production.