With many vehicle manufacturers still trying to recover from the pandemic, many predictions have the industry as a whole making a recovery over the course of 2023 that will return it to pre-pandemic levels.
There Still Aren't Enough Computer Chips
Automotive computer chips are still in short supply. While March doesn't show a full return to normalcy, it definitely shows that the number of chips is on the rise. Automakers around the globe have already lost $210 billion due to shortages in chips, and opinions are mixed as to when the number of chips needed for consistent, standard production will normalize.
Investments were made in chip plants in Germany and the US in 2022, but the changes haven't yet been enough to compete with demand. With enough chips, vehicle prices will adjust downward and dealerships will be able to fill their lots with additional options and choices for buyers. That improves the auto industry landscape for everyone.
Prices are Staying High Due to Limited Inventory
Another notable point in the auto industry news trends is that prices for both used and new vehicles are still inflated. The average new car price is over $46,000. Why? One of the reasons is that the inventory is limited, which drives up prices. That inventory is limited largely because of the shortage of computer chips.
While Ford and GM have a lot more cars on their lots than some of their competitors, prices remain inflated and some models are harder to get than others. Cars are staying on dealer lots an average of nearly 30 days before they're sold now, which is up from 19 days one year ago.
New Vehicle Sales are Beginning Their Recovery
The sales of new vehicles had dropped off quite a bit during the pandemic, and still haven't gotten back to normal levels. While part of that was the vehicle shortage, part of it was also the buying public using caution, to make sure they weren't overspending during uncertain times. Sales incentives are returning, and that's enticing more buyers. While 31% of new cars are still estimated to sell above MSRP, that's down from 48% in July 2022.
Ford is Increasing Its Production
Ford has announced that it's going to increase its production again. A recent issue with the batteries in the F-150 Lightning trucks was a concern, and there was speculation of a wider-scale problem with lithium-ion batteries used to power EVs. However, the issue seemed to be a minor one that didn't repeat itself, and that helped Ford get back to making more of the trucks. Thousands of them have already been ordered by consumers waiting for them.
Tesla Plans New Next-Gen Cars
Another company that's continuing to plan and develop more vehicles for a recovering industry is Tesla. The company is already working on its next-gen cars, and is moving toward additional options and more affordable vehicles. By creating options for cars that cost far less than the current Teslas do, the company can capture more of the EV market.
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