Why There Is A Shortage Of New Cars In The UK
In the modern, technology driven world, everything seems to be run on ever more sophisticated microchips and electronic components, and powered by electricity. Thus, purchasing any such products has become extremely difficult as supply and demand has been squeezed. Furthermore, finding and buying components has become a logistical nightmare as a result of:
- Increased demand
- Supply chain disruption
- Extreme weather patterns in key locations
- Fire damage to key production facilities
- Ukraine conflict
- Global oil price hike
- Cost of living crisis
- Economic downturn
- Winter approaching
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Case in point as of August 2022 “Sales of new cars in the UK fell by nearly a 10th in July because of supply chain problems, forcing the industry body to cut its full-year forecast even though it expects chip shortages to ease in the coming months” as “a global shortage of semiconductors, exacerbated by Covid lockdowns in important manufacturing and logistics centres in China, along with the disruption caused by Russia’s invasion of Ukraine, all restricted production of new cars. (Guardian)
These events have triggered a significant shortage of core components and has a huge impact on production line scheduling. The ramifications have a ripple effect across the entire automotive industry – from planning and scheduling to running and processing within production facilities.
As the past couple of decades has seen cars become increasingly dependent on such electronics, and with the push to e-vehicles this is only going to exacerbate further, the lack of semi-conductor and other electronics parts trickles all the way back down to supply and demand of the raw materials required to make them. This is distressing the supply chain with interruption across the board for all sectors.
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What Is A Semiconductor Chip?
Commonly known as microchips, semiconductor chips are tiny fragments of silicon crystal intricately lithographed and etched with microscopically small electrical circuits. In the context of vehicles, these microchips process every task a modern car performs.
They are so important and fundamental to a car running that in today’s electronically overloaded vehicles one car will have up to 3,000 microchips in it. As reported by tech company ASML, there were 932 billion microchips produced in 2020, for use in every type of electronic device. As it stands the automotive industry accounts for around 15% of this global market, which is only going to increase as more vehicles (and elements of their running) go electronic.
Why Do New Cars Need Semiconductor Chips?
Semiconductor chips do an incredible amount of jobs within a car. From running obvious functionality such as touch screens and dashboards to the less obvious but equally important metrics controlling and informing on the vehicles performance helping to improve the engine’s efficiency and lower emissions. Many safety features also rely on these chips, such as driving assistance, automatic emergency braking systems, cruise control, backup cameras and airbag deployment systems. In short, these chips play a vital role in a vehicle not only performing optimally but keeping you safe too.
New Cars Affected By Semiconductor Chip Shortage In UK
At the time of writing the lack of chips means car makers across the board are struggling to keep up with demand. Most notably these manufacturers have had to temporarily shutdown plants at some point or seriously cut back on production.
- Jaguar Land Rover
- Volkswagen Group
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