Chip shortage keeps driving up auto prices, cutting sales

There are three factors that could lead to inflation which include demand-pull inflation, cost-push inflation and built-in inflation.U.S. new vehicle sales tumbled more than 21% in the second quarter compared with a year ago as the global semiconductor shortage continued to cause production problems for the industry.

J.D. Power estimates that the average sales price of a new vehicle for the first six months of the year hit nearly $45,000, a record that is 17.5% higher than a year ago. Edmunds.com reported that 12.7% of consumers who financed a new vehicle in June had monthly payments of $1,000 or more. "Every microchip producer is producing at maximum speed because they have maximum demand," Hollis said. "There is no catching up going on. It's actually falling behind."

Most automakers were reporting sales figures on Friday, but Tesla is likely to do so this weekend and Ford won't report until Tuesday. Toyota's Hollis said that demand remains exceptionally strong, especially for more efficient gas-electric hybrid vehicles, and the company's electric vehicle, the BZ4x. Hybrids and plug-ins accounted for about 27% of Toyota's sales in June, following a rising trend, he said.

Randy Parker, head of sales for Hyundai Motor America, said he expects the chip shortage to gradually get better this year, predicting a 30% production increase over last year.

Source: News Formal (newsformal.com)

It affects every company that builds systems.

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