Used or new: cars are getting more expensive

New bad news for the auto industry almost every day: the shortage of microchips is turning from an acute bottleneck into a permanent problem. This could make vehicles even more expensive – although the price level is already quite high.

The supply crisis for microchips is hitting the automotive industry harder and harder, and is increasingly making itself felt in consumers’ wallets as well. Because fewer vehicles are being produced and put on the market, there are fewer discounts, analyzes industry expert ferdinand dudenhoffer.

A typical new car has become more expensive for the customer by an average of 360 euros in august and september. In any case, the level is already quite high due to the scarcity of the total quantity. Prices rise even more in the tight used car business.

The main reason for the misery is the lack of semiconductors – the usually asian producers do not deliver enough

So many cars could be sold .

On the manufacturers’ side, the partially depleted supply market for semiconductor parts – the basis of all electronics installed in modern cars – is now leaving threatening marks. At VW, for example, a "task force" is working around the clock to purchase batches still available.

But at the same time, production shifts continue to be canceled for entire weeks. europe’s largest carmaker announced on wednesday that it will have to operate mainly short-time work at its wolfsburg headquarters until mid-october – not for the first time.

The paradox: the persistent shortage of parts at the dealers meets a demand that could hardly be better. After postponing investments in the most difficult corona months, many private customers and companies are once again daring to purchase durable goods such as cars. But manufacturers cannot deliver as much as theoretically possible because they lack microchips. "Stockpiles" with half-finished cars and trucks are already forming in some yards and parking areas.

Used vehicles more expensive than ever

Dudenhoffer does not expect the price trend to change soon. "New car buyers must also expect decreasing discounts in the coming months", he estimates. Those who want to switch to a used car hardly have it any easier: in july and august, typical three-year-old used cars became around two and a half percent more expensive, according to figures from market observer deutsche automobil treuhand (DAT). More recent data is not yet available, but a further increase is assumed. "The used car market is currently experiencing an upswing in prices", reports a DAT spokesman.

What applies to new cars also applies to used cars: firstly, there are too few of them and secondly, they are also quite expensive

The chip shortage is also partly to blame. Because of the supply bottlenecks, many potential new car buyers are switching to a young used car – and in some cases are finding the market empty. "Young used cars are often in short supply, as fewer new cars have been built and registered due to the pandemic.", says DAT.

Above all, there is currently a lack of company cars, rental vehicles and short-term registrations, which normally fill up this market segment. At least for the automotive trade, however, the current development is a "positive signal". During the corona-related closures, used vehicles would have been parked there for a long time, resulting in high costs. "The trade needs this revenue", the DAT speaker explains.

End of the crisis not in sight

However, a rapid easing of the situation on the market as a whole is not to be expected. This would require significantly more completed cars. according to figures released by the munich-based ifo institute on wednesday, 96.7 percent of companies in the automotive industry are complaining of supply bottlenecks.

In new business, suppliers such as BMW and mercedes-benz or the commercial vehicle divisions of volkswagen and daimler are also affected. After hastily terminated contracts with chip producers or capped volumes in the corona sales dip in mid-2020, many places are now lacking urgently needed parts. The situation is exacerbated by the semiconductor industry’s own capacity bottlenecks in Asia and the USA.

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Christina Cherry
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