What the chip shortage and manufacturer feature deletions mean for consumers

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While a global shortage of microchips continues pretty much unabated, where does that leave the average consumer in their quest for a vehicle?

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“Shortages have dampened inventory, but stock is trickling through,” says Daniel Ross, a senior auto analyst with Canadian Black Book. The new and used mix of cars at your local dealer’s lot will more likely be more used than new, however, as the automotive world continues to negotiate — and wait — for the semiconductor chips that your new ride sports by the hundreds. 

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Let Ford, for instance, illustrate a case of “How it Started” and “How it’s Going”. Back in early May, The Drive published aerial photos of stockpiled vehicles , completed except for the missing chips. “ The Drive obtained satellite images of Kentucky Speedway, posted above, which paint a pretty clear picture. There are thousands of trucks at the facility awaiting chips. You can see the progression, particularly in the right-hand lots; the first photo in the set of three is dated April 18 of this year while the second is from April 26. The third and final shot is a more recent view captured on May 1.” So many Super Duty trucks in the logjam, they could be seen from space.

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By the start of July, the Detroit Free Press was reporting that Ford had secured a source of semiconductor chips and “ [were] working to get chips into F-Series pickups and get them out to dealers. That’s [the] first priority,” said Erich Merkle, U.S. sales analyst at Ford. “We’ll see our inventories improve. It’ll take time but stock will gradually start to improve the second half of the year.” Those trucks are the hottest thing in the market. Ford, and every other manufacturer of these popular behemoths, want to see them moving to fluff up a beleaguered bottom line.

But wait. Just last week, Automotive News reported one more twist in the long road to getting the chips into the trucks. Ford is apparently considering training dealer techs to install the missing chips at the dealer level. While discussions are ongoing and no dealer would be forced to take this on, remember how thirsty dealers are to get their hands on these trucks. Even a yard full of not quite ready for prime time trucks looks better than an empty lot.

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Nobody asked me what I think (why would they?) but my word of caution would be for Ford to look at Tim Horton’s. Years ago, they started sending out their doughnuts half baked to be finished off at the local outlets. The quality drop was noticeable. Furthermore, you’re tasking a dealer tech who is already swamped to do this. Remember, new cars are scarce and used cars have skyrocketed in price, so people are keeping and maintaining their cars. Slosh in COVID work adjustments and I’d just call this a curious experiment.

GM announced last week that after months of uncertainty surrounding the supply of the microchips, they’ve had to pause production at most of their North American plants that build pickups. That includes the “CAMI Assembly in Ontario, where GM builds the Equinox, [and] GM will extend downtime to August 16. CAMI was supposed to resume production next week following its scheduled two-week summer shutdown.” The impact of the disruption of this huge industry has a cascade effect.

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Manufacturers have already been delivering vehicles that are missing chips they say don’t impact that vehicle’s performance or safety. GM has dropped the wireless charging pad option from many of their SUVs, while, “ Nissan is leaving navigation systems out of thousands of vehicles that typically would have them because of the shortages. Ram no longer offers its 1500 pickups with a standard “intelligent” rearview mirror that monitors for blind spots. Renault has stopped offering an oversized digital screen behind the steering wheel on its Arkana SUV — also to save on chips.”

What do you do if you’re in the market for a car? Daniel Ross admits that nobody has a crystal ball, and while there is chatter that things will start moving more reliably by the first or second quarter of 2022, those goalposts keep moving, even for the analysts. “If you must buy a car now, make sure to go to the manufacturer’s website to ascertain the MRSP of that car,” he says. If a dealer is trying to charge more, go to another dealer. They’re not all doing it. We see prices on some models roaring above list in the U.S., and there are some Canadian dealers testing the water on (over) pricing.  Scroll down on this Autotrader offering of Honda Civics; there is a 10K gap on 2022 prices, which is only insane. If you’re taking a car in for trade, use a service like Canadian Black Book to work out a reasonable value of your trade.

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Ross says our stronger Canadian dollar is stopping some of the flow of our used vehicles across the border, a common cause of our frequent shortages in that area. He suggests calling around to dealers for the vehicle you’re looking for, but not to be too hung up on colour or even trim level. “You might have to sacrifice something to get the car you want.”

Depending on your risk level, your car coming off lease will no doubt be worth more than what is posted on the “residual” line — your buyout price. Consider keeping the car you already know, or selling it privately to make a few bucks. If you keep it and decide to trade it in a short time later, remember that dealers calculate trades from wholesale numbers, not retail. 

Slowed production, missing features, delayed deliveries. Ask a lot of questions and make sure you’re getting what you pay for, because you’ll be paying more than ever in the near future. And remember, a small rebate for a missing function might not be worth it if that feature is one that matters to you.