We have known for some time that there is a chip shortage and a very disrupted supply chain. However, General Motors (GM) is currently so short of chips and other components that it has not been able to deliver nearly 100 000 cars to the shops.
Almost all car companies are reporting problems
Automakers have been talking about supply chain problems for some time. We can see reported problems for many automakers with sales down 15% or more in the first half of this year. GM is also reporting an 18% drop in US sales in the first half of the year.
For example, a Toyota representative commented on the chip market situation.
“Microchips are the elephant in the room, but you have other ancillary issues, and it’s just a very fragile supply chain which is going to last for a while.”
By slowly creating a shortage of new cars on the market, the price is rising. According to available data, the average transaction price in the U.S. in June was $45,844, about a 15% increase from a year earlier.
The state of the market is reflected in stock prices
That car companies are not experiencing good times can be seen in their stock prices. For example, GM’s shares have fallen nearly 46% in the first half of this year. Their American competitor Ford started the year at a share price approaching $22 per share but now the price is closer to $11 per share. Similarly, electric car market leader Tesla has already written down over 43% since the beginning of the year, dropping from $1,200 to its current price of $682 per share.
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So carmakers must hope that the global supply chain issues, which are very much intertwined with inflationary pressures all over the world, are resolved soon. In theory, companies could be helped by tapping into the metals wealth of Africa, where many supply companies are gradually starting to go. However, this is only a theory that would require a large investment and it would certainly take time to put this solution into practice.
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