There has been a high demand for chip technology for car manufacturing these years, and the demand and value of these chips continue to increase daily. However, despite the great demand, there has been a shortage of these chips.
As a result, the cost of newly manufactured vehicles has skyrocketed, making the cost of vehicles 10% more expensive than in previous years.
The price of newly manufactured vehicles is estimated to remain on the top of the charts till November or December. Otherwise, the rates of used cars are leveling down on the graph, making it almost equal to the previous rates.
factors are responsible for this incident in the prices of the vehicles. The main one is the problems and challenges faced by the supply and manufacturing of chips and other complex electronic equipment.
The Russia-Ukraine war has destroyed the supply chain of raw materials, making them even more expensive and hard to get.
However, the prices are expected to remain on top of the charts until next year. If the problems from the suppliers’ side get fixed, this will also contribute to a huge decrease in the rates of brand-new vehicles.
However, there are certain regions around the globe where vehicle production is stopped due to ongoing inflation. Inflation in many states around the world has also destroyed the manufacturing sector.
Furthermore, if cars are manufactured somehow in these states, the locals won’t be able to afford them. A great cause behind this downfall of the global automotive sector is the high rise of inflation. It will take a long time before the states can recover from their losses.
The skyrocketing fuel prices such as Diesel and gasoline have damaged the automotive sector greatly. Many locals continue to commute through the public transport sectors and refuse to purchase their cars when they consider these high fuel prices.
The only hope was Electric Vehicles (EVs). However, due to the shortage and delays in the manufacture of electrical components, their production has also decreased to a great extent.
Furthermore, government actions toward establishing electric vehicle charging stations still need to be taken. Therefore, owning a car and maintaining it has become much more expensive than it was before.
The only hope to bring the prices of cars back to normal is to stop this ongoing inflation around different parts of the globe. In addition, car manufacturers and automakers must boost their production of raw materials and technologies for automobiles.
As for the shortage of chips, it might take some time to bring back the rate of manufacture of chips equal to the demand for the chips. Until that happens, the locals must continue using and purchasing used vehicles, as they are more available.
