Understanding The Factors Affecting The Market
If you’re interested in buying a car in 2022, you may have noticed that many dealerships are suffering from a shortage of stock, and that vehicle prices are on the rise overall. The auto industry trends seem to be steady with continued challenges as we continue through the year, so it’s important to take a look at the factors that are increasing the prices of both new and used vehicles.
Chip Shortages
Modern cars are full of tiny computer chips or “microprocessors,” that are responsible for a wide variety of tasks – from operating the car’s radio to monitoring fuel injection, traction control, and more.
Unfortunately, a massive chip shortage is currently in progress, and is expected to last until the end of 2022. What this means is that microprocessor manufacturers are operating at full capacity but are still not able to make all the chips that automakers need. This, in turn, has led to higher prices and lower overall stock of new vehicles.
Pandemic Shutdowns
The COVID-19 coronavirus pandemic shut down factories, distribution centers, and dealerships for months in early 2020, and while most of the world is now recovering, these shutdowns have had a “ripple effect” that has made it harder for car manufacturers to get the components they need. The effects of these shutdowns could easily persist within the auto industry for t well into 2022 or beyond.
Suez Canal Blockage
The massive container ship Ever Given blocked the Suez Canal for six days from March 23 to March 29, 2021. The blockage of this critical canal linking Europe, Asia, and The Middle East has had negative effects for many automakers, since it’s a very popular route for shipping automotive components and completed vehicles alike.
Increase In Pre-Owned Prices
Prices of used and pre-owned cars are jumping. Why? Mostly because new cars are scarce, due to the above factors mentioned, such as the chip shortage. Just as new vehicle manufacturing drives inventory, used vehicle availability stems from its own supply chain, which has experienced shortages and shutdowns that limit the distribution to local dealerships. Some customers may also be more willing to shop for a used car to save money, driving demand for used cars rather than new, due to the financial strain that COVID-19 has put on people who may have lost their jobs.
Shop INFINITI OF DENVER & Get A Great Price on A New or Used Vehicle
At INFINITI OF DENVER we don’t just offer luxury vehicles, we offer value. We recognize that the auto industry has experienced turmoil in the face of shortages and shutdowns, but we pride ourselves on ensuring that we offer only the best in luxury coupes, sedans, crossovers, and SUVs without relying on inflated pricing. We deliver on our promise to provide our Denver neighbors with the exceptional cost and quality so you can get the most our of your luxury vehicle despite the trends of the ever-changing market.
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