Auto Dealers Have Low Inventory Over Chip Shortage

Blame it on the cascading problems caused by a global shortage of computer microchips exacerbated by the Texas February Freeze.

Houston car dealers are having trouble keeping enough inventory on their lots.

The shortage began when automakers cut orders for chips, which take about a year to manufacture, just after the Covid 19 pandemic collapsed the auto market in early spring of 2020. Increased demand for consumer goods and electronic devices scarfed up everything automakers didn’t want, and when demand for cars returned, there were few chips left to be had. A rapid economic recovery has left cargo ships filled with autos waiting offshore for docking space while US manufacturing plants are able to assemble almost everything that doesn’t involve chips. Pickups and SUVs, the most popular models, are getting harder to come by.

And now, there is another problem that’s surfaced -- plastic.

“A lot of the petrochemical plastic plants were shut down, so a lot of plastic parts, like foam for seat cushions, are being delayed as well,” says Roger Elswick, Chair of the Houston Automobile Dealers Association of the worries a rare recent ice storm on Houston’s East side has contributed.

All of which means if you are in the market for a new car and know exactly what you want, buy it. You may have to order the car and wait longer than you had anticipated but don’t wait for conditions to quickly improve. GM and Ford are warning investors earnings will be reduced by a billion dollars this year. “If you’re in the market and you do find the car that you want, I would not wait around, because it’s only going to get worse as far as a shortage of inventory,” advises Elswick.

photo: Getty Images

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