What is the Automotive Chip Shortage?

Red 2021 Toyota Sienna Hybrid driving in city street


If you’ve been listening to the news in the last few months, you’ve probably heard about the automotive chip shortage affecting car manufacturers across the country and around the world. However, you may be wondering what the chip shortage is, exactly, and how it will affect your ability to find a new or used car in Long Branch. To simplify a complicated situation, most of the products we use every day have semiconductor chips to operate properly. This includes everything from your phone to your washing machine to your car. During the coronavirus pandemic, the number of people that were buying entertainment devices and other appliances that used semiconductor chips grew exponentially, and the supply was unable to meet the market demand. 

These coinciding events led to the automotive chip shortage you’re hearing about on the news today, and it’s affecting everything from car sales to the release of new technology. However, the automotive chip shortage has already shown signs of improvement. If you’re looking for a new vehicle for your Toms River commute, you can trust that Galaxy Toyota will be able to secure the vehicle you need at a price that will fit your budget. 

Learn more about the car chip shortage below to see how it’s affecting new and used auto supply, how long it’s expected to last, and how our team is working hard to help our customers get the vehicle they need.

Why is there a Chip Shortage?

The chip shortage you’re hearing about on the news was created by an increase in demand for products that contained semiconductor chips and the simultaneous limited production of these chips during the coronavirus pandemic. When the chip supply could no longer meet the market demand, every product that required a chip to operate had a halt in production. While semiconductor chips are in many products sold in Freehold stores, the automotive industry was hit the hardest by the shortage. 

Part of the reason the car chip supply is suffering is due to the amount of time it takes to produce a semiconductor chip. These chips must be created in a pristine lab environment to ensure no dust or dirt can accidentally land on the chip and cause it to malfunction. Additionally, semiconductor chips are incredibly small and are extremely complicated to build. The restrictions that were implemented for the coronavirus pandemic further complicated matters, preventing semiconductor chip factories from operating at full capacity. All of these factors combined means that chip manufacturing is taking more time to complete, and until the car chip supply can meet demand again, automotive manufacturers will have to wait. 

How is the Chip Shortage Affecting New & Used Vehicle Supplies?

While many industries are affected by the semiconductor chip shortage, the automotive industry is being affected the most. This is because new vehicles require hundreds of semiconductor chips to be installed to ensure their systems can function properly. The automotive chip shortage has led many manufacturers to suspend or limit the production of their vehicles. This means that fewer new models will be available for purchase on showroom floors across the country. The shortage has also caused the price of many new vehicles that have already been produced to increase due to competing demand among dealerships and the public. 

The used vehicle market has also been affected by the car chip shortage. As new vehicles become scarce, private sellers and dealerships are searching for used vehicles to supplement their inventory. Subsequently, the cost of used vehicles has gone up about 20% to 30%. While this can be an obstacle to used car shoppers, drivers looking to sell their used vehicle may be offered a higher price than they would otherwise.

How Long Will the Chip Shortage Last?

The good news is that the automotive chip shortage is expected to come to an end relatively soon. While no one knows exactly when the shortage will be resolved, mass vaccinations and the relaxing of Covid-19 restrictions have allowed production in many facilities to continue at their pre-pandemic levels. As production begins to catch up with market demand, more vehicles will find their way onto showroom floors and prices will stabilize.

Can I Still Buy a Car from Galaxy Toyota?

Absolutely! Whether you need a new SUV or sedan for your Long Branch commute, the team at Galaxy Toyota is working hard to ensure we have enough vehicles in our inventory to meet the needs of our customers. Browse our new or used vehicle inventory to find the right vehicle for your daily drives, and then contact our finance team to arrange a time for a test drive and begin the car buying process. 

Find a New or Used Vehicle at Galaxy Toyota

When you’re ready to find a new or used vehicle for your commute, trust the team at Galaxy Toyota to secure the vehicle you need at a price that will fit your budget. We offer a variety of new vehicle specials and used vehicle specials that can help you save on your purchase, and we have online tools that can value your trade-in or help you plan your monthly payments. Visit our Eatontown dealership today to get behind the wheel of a new or used vehicle!

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