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.
Toyota produced 4.5 million cars in the first half of 2021 and sold 5 million. The chip shortage is equivalent to cutting out 70% of Toyota.
Here are some main points to understand the chip shortage:
* It takes years to build entirely new semiconductor fabs
* chips (microcontrollers) that have been used in cars tend to be older and less profitable chips
* chip makers do not want to make more factories for older chips
* chip factories have increased their production capacity by 8 percent since early 2020 and plan to boost it by over 16 percent by the end of 2022