Chips are scarce sending car prices up

"Here's how this mess happened and why it's not going away soon."

https://www.autoblog.com/2021/05/05/automotive-chip-shortage-explained/

 

Interestingly enough, we started seeing the effects of this since about December workwise. What's been happening is that all IT Hardware (computers, docking stations, etc) that we usually procure from HP has been at a standstill. We have been seeing things trickle in, but put it this way, we are behind on an order for 150+ laptops. To make things worse, we see a few items trickle in by 2's and 3's. Even monitors are backordered. It's all sad. What it's going to end up doing is creating a supply and demand increase in prices, which we are already seeing. It's certainly frustrating my employees.

Cheers,

Sean

 

The impact is immeasurable. Except to those living with the reality of it. The rest of us.....as is normal - I guess - continue to mosey along. I do know this.....we have gone to War over far less. And I'm not suggesting that as a response or answer. Just stating a fact.

 

Man, i'm totally with you. It certainly looks like that's where it's headed indeed, just in general.

cheers,

Sean

 

This was hitting everyone else last summer. My company thought ahead a year ago and purchased a large amount of inventory (which we have since used up) instead of buying monthly. Prices for components are up by 30-50%. Embedded processors are even higher. The supply train for automotive is long and slow and they are not setup to adapt quickly. Add in the fact that in many cases they are buying parts from an economic competitor/enemy (China) that could care less if any foreign industry survives and you'll see why we need to lower business taxes to keep industries in the United States. Understand that businesses do not pay taxes. The consumer that buys their product does in the form of the price paid for said product. Maybe if we didn't tax manufacturers for incomplete/unsold inventory they would have had incentive to stock parts for emergencies like they used to do and enhance their purchasing power and thus aid in lowering consumer prices. The multi-industry model of "just in time inventory" is another problem caused by trying to avoid inventory taxation and is finally hitting them hard. This was a perfect storm of economic stupidity.

 

Interesting read, it puts things into perspective. I was at dealership recently and the salesman mentioned a chip shortage. I believe they were factoring that into their 10k adjusted market value of a TRD Pro.

 

What goes around comes around.

Remember paper straws?

They were terrible!

Until this

 

And now you know why the covid vaccine is so huge
They're traking us!
LMFBO!!!!

 

To be clear. You couldn't have spelled it out any better. But, it takes a person who understands how a business operates to fully grasp your words. That's not a putdown to anyone. It's called having skin in the game.

 

You telling me. Looking to upgrade my outboards for the boat and I'm being told wait time of 6 - 9 months.

Good thing mine is still running or my boat would be sitting

 

Absolutely... But remember too, and I think this is all a ploy. Remember China was on a mission to be the technology superpower of the world by 2024! They threw Covid in, now shortages... Anyone get where I'm going with this?

Cheers,

Sean

 

imo - The only thing that's for sure is that they've gone all in at this point.

 

Absolutely. Did anyone notice how they were the first to get domestic manufacturing up an running months before anyone else?

 

It is a miracle to me that the world has lost over 3 million people and and the world does not react to China. The government in China has zero remorse and you're right economically they were the first to bounce back.

We are fools in the United States as well. Unfortunately, American executives and share holders and everyone else sold their souls to China over the years with manufacturing. The alarm bells have been ringing for many years and everyone has ignored them.

The U.S. does need to lower taxes to get investment and jobs back here, but sadly I do not see that happening. The general public does not realize that large and medium corporations have tax experts and legal experts constantly analyzing where to set up shop not just for manufacturing but where to put holding companies that own things such as intellectual property. Its a big shell game and we as Americans lose out. Nobody in Washington is smart enough and/or they are simply selfish to truly investigate what is happening in industry and launch an effort to change.

 

Before this gets locked since its getting political.

We will never see manufacturing completely back in the US. Never. The price us American's demand to get paid prevents that plain and simple. I dont blame the executives they are doing what they are hired to do and is make as much profit as possible.

I mean come on they want to raise minimum to $15/hr for flipping a burger. Sorry but McDonalds is not a career nor is it meant to make a permanent living off.

Federal Government makes BAA shit apply to everyone? Then guess what prices go up. Good part is our balls won't be in China's hands. But then people will bitch about outrageous prices.

 

Toyota lot on this island is empty.

 

Very good point. I've always said that... Everyone thinks that a $15/hour minimum wage is going to cure America's problems. In fact, it will make it worse. Not only will places like McDonalds now have ONE or TWO people running a whole restaurant, (resulting in long waits, etc., and customer dissatisfaction), but also, everything we buy will almost double. I'm not sure how anyone in their right minds would think that this strategy is going to work. Leads us further down the rabbit hole.

Cheers,

Sean

 

The higher the mini wage, the more taxes collected.

 

What is the history of minimum wage in the United States?

The federal minimum wage was introduced in 1938 at the rate of $0.25 per hour (equivalent to $4.54 in 2019). By 1950 the minimum wage had risen to $0.75 per hour. The purchasing power of the federal minimum wage has fluctuated; it was highest in 1968, when it was $1.60 per hour (equivalent to $11.76 in 2019).

What was min wage in 1970?

The minimum wage went to $1.00 an hour effective February 1967 for newly covered non-farm workers, $1.15 in February 1968, $1.30 in February 1969, $1.45 in February 1970, and $1.60 in February 1971.

As can be seen by looking at these numbers it's at best momentary assistance because the gap it closes only opens again, with time. There's no good answer(I firmly believe that, based on years of watching the ebb and flow) and there never has been - a good answer. imo That said, I can remember when my Dad(an oilfield worker at the time) had to have 90 hours on the clock - for that week - before he went on overtime.

 

Prices all around are insane right now.
I work in distribution and the increases we have seen are out of this world.
I think some of it is legitimate, but I think some are using this as an opportunity to arbitrarily raise prices.

 

One more thing that is sending the price of used cars soaring.....

Rental car agencies rush to build back fleets — by buying used cars

https://www.autoblog.com/2021/05/03/rental-car-agencies-buying-used-cars-chip-shortage/

 

Wow, that's INSANE!!!!

Cheers,

Sean

 

Hmmm. Rental agencies... Maybe I can get a decent price for my Tahoe.

 

20/20 had a show last week about this. They added China May go to war with Taiwan as they want to become the strongest economic country in the world and corner the market, then drive prices through the roof. Our administration has no clue what to do. Even if US could produce chips our tech is far far behind
Hopefully it doesn’t get ugly

 

Unfortunately, should it come to pass and if Taiwan isn't supported by the rest of the world, it won't be much of a war. Taiwan is but a small island roughly the size of Florida.

 

Interesting conversation. Thanks all for the perspectives.

 

Greed and corruption will be our downfall.

 

Yes my friend, contentment and inattention intersected many years ago. It is now, that the price will be paid, and the cost will be mighty. Not a quote.

 

It's not just chips

"analysts estimate the price of a car’s raw materials have climbed 83% in the year through March."
.

 

What I find crazy is that most of the Toyota dealers in my area look as though they've been abandoned. It's absolute NUTS! Interestingly enough, the Chevy dealers look pretty full, so do the Chrysler. I'm wondering if this is something a little deeper than what appears on the surface. It's really strange.

Cheers,

Sean