The global microchip shortage has led to unprecedented low inventory levels for new vehicles, in turn leading to increased demand and higher average transaction prices. It may seem as though oblivious car shoppers are just getting gouged by dealers trying to capitalize on the situation, but according to a new study conducted by Cox Automotive, most consumers are well aware of the chip shortage and the effect it’s having on the vehicle market.
The study found the vast majority of consumers surveyed “are aware of the global microchip shortage and are expecting limited choice and higher transaction prices,” when they get to the dealership. Dealers are also being upfront with these buyers, telling them that due to their low inventory levels, they’ll likely be paying full price to put the vehicle they want in their driveway.
According to the survey data, 76 percent of buyers were aware of the chip shortage, while 83 percent of those buyers were aware of the impact it’s having on the new vehicle market. Furthermore, 73 percent of car shoppers expect to face higher prices, while 59 percent expect less favorable deals/lower incentives. A surprising 42 percent of people would be willing to pay over MSRP to get the vehicle they want, as well. This seems to suggest that dealers aren’t pushing consumers to pay MSRP or above MSRP amid low inventories, as they came to the dealer expecting to pay more than usual.
GM has been forced to temporarily shut down several of its North American assembly plants due to the chip shortage. The automaker has lost out on the production of 80,000 vehicles so far this year, including 17,000 examples of the Chevy Equinox crossover, which is one of its best-selling models. The automaker is prioritizing its full-size trucks and SUVs amid the chip shortage, which are not only some of its best-selling products, but also its most profitable. Despite its best efforts, GM has still hit some chip-related problems with the Chevy Silverado and GMC Sierra, building certain examples without Active Fuel Management (AFM) and Dynamic Fuel Management (DFM) technologies to save on chips.