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The automotive industry is currently going through a difficult period, which does not seem to be nearing the end. The shortage of semiconductors on the market and other problems associated with the coronavirus pandemic have forced many automakers to reduce or even shut down. Vehicle production thus recorded a record decline not only in the Czech Republic but also in the world. For this reason, too, customers now have to pay extra for new cars. At the same time, car maintenance costs are rising.
Chip crisis
In November of this year, the volume of cars produced in the Czech Republic exceeded one million. Compared to previous years, however, this happened two months later. Reducing car production is not just a domestic issue, but a global one. “The past has been very difficult for the automotive industry. The covid-19 pandemic has severely disrupted supply and logistics chains in a globally closely interconnected industry. In addition to the shortage of raw materials, the biggest problem in the global semiconductor market has been. “ explains Vojtěch Severýn, Communications Manager of the Automotive Industry Association.
Semiconductor chips are indispensable for the operation of modern cars. In today’s average car we find about 1,500 of them, in the most advanced ones up to twice as many. Many of the causes of their market failure are directly linked to the coronavirus crisis. “During the pandemic, there was a significant increase in demand for electronics, for which chips are also necessary. Some factories have also switched to producing a new generation of chips that automakers do not want to work with. Natural disasters also played a role, such as the fire at the Intel factory, which is one of the most important producers. We cannot forget the sharp rise in shipping prices after the blocking of the Suez Canal, “ describes Marek Zukal, CEO of Quick Stop Car.
Improvements next year?
Due to the lack of chips, many car manufacturers and their suppliers had to reduce or directly interrupt production. It is estimated that about five million fewer cars will be produced worldwide this year, compared to the original plan. “We estimate that due to the chip crisis, up to 300,000 vehicles will not be produced in the Czech Republic this year, which would otherwise be of interest on the market. This corresponds to total sales losses on the part of car manufacturers and suppliers in the amount of approximately 260 billion crowns, “ outlines Northland’s situation in the country.
At the same time, most forecasts do not offer the automotive industry a very optimistic outlook for the coming months. In the next year, a more significant improvement in the semiconductor market is probably not expected. That could not come until 2023.
The price of cars is rising, and services are becoming more expensive
Subdued production, rising energy and transport prices, rising inflation – all this is significantly reflected in the final price of vehicles. According to the Czech Statistical Office, it grew by 7.4 percent year on year in November this year. At the same time, a large number of customers have to wait up to twice as long for a car as usual. In addition to new cars, used cars are also becoming more expensive, and there is also a shortage of them on the market.
Motorists will therefore have to reach deeper into their pockets not only when buying a new car, but also when maintaining it. According to Cebia research, services have increased their services prices by nine percent this year. “At the same time, they have a record amount of work and there will be even more. If car production is stalled for two to three years, people will have no choice but to keep their current cars alive at the cost of repairs. Older car owners usually rely on smaller garage repair shops. However, owners of newer models rely on more expensive authorized services, “ concludes Zukal, whose company Quick Stop Car plans to enter the market at the beginning of 2022 and build 400 car repair shops in the Czech Republic by 2024. You should offer lower prices than authorized service centers. At the same time, they will have professionally trained staff and the necessary modern technology.
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