About a third of U.S. consumers say they’ve been affected by the automotive industry’s semiconductor shortage over the past year-and-a-half, spurring behavior changes that are driving automakers and their suppliers to get smarter about their supply chains.
That’s according to recent research from electronics industry analysis and technology company Supplyframe, which polled 1,000 U.S. consumers about the issue for a report to be published this week. Supplyframe partnered with research firm Propeller Research on the project. Consumers say they are aware of the chip shortage and its effect on vehicle availability and pricing, and many say they are holding off on that new car purchase as a result.
About half of those surveyed (48.3%) said a lack of automotive inventory due to the chip shortage has led them to buy a used car instead of a new one, and about the same number (48.5%) said they have noticed an increase in automotive prices throughout the pandemic. More than a fifth (21.8%) said that inflated prices have deterred them from buying a car, according to the research.
The problems highlight the need to develop smarter supply chains, especially as automakers compete with other industries for much-needed chips and other electronic components.
“Due to the pandemic, the automotive industry has faced challenges with production as well as with a changing consumer mindset, as highlighted by this research,” Supplyframe CEO and Founder Steve Flagg said in a statement announcing the findings. “But even beyond the pandemic, the automotive sector will continue to compete with businesses in other industries such as aerospace, consumer electronics and medical devices for a dwindling supply of semiconductors and electronic components. Having multiple industries sourcing from a shared supply will lead to complications even in the long term. Automakers and companies in these other sectors now need to ask themselves how they can better manage the chip shortage to meet customer demand and allow faster distribution.”
Solutions will include public-private partnerships that share market intelligence and identify early signs of future shortages to prevent similar crises, the researchers said, noting that the current chip shortage was expected to cost the global auto industry about $210 billion in revenue last year.
“Shifting demand, pre-existing supply and sourcing issues, and the ongoing pandemic point to the need for outside-in intelligence on global supply chains and the value of designing resiliency into products,” according to Flagg. “Leading original equipment manufacturers in the automotive sector and beyond are beginning to take steps to make sure that happens sooner rather than later.”
Most consumers surveyed said they expect the pandemic-related supply chain problems to continue this year. Just 13% of those surveyed said supply chains will return to normal shipping and production schedules this year, and nearly half said they think shortages will continue throughout 2022.
Supplyframe leaders said their previous research shows that global manufacturers can expect severe supply constraints and cost inflation pressure for many component categories into 2023.