Semiconductor shortage

A worldwide problem affecting many industries, including the automotive industry

The Covid-19 pandemic caused a perfect storm for the automotive industry. At its peak, restrictions to control the virus reduced vehicle and component production worldwide. Alongside showroom closures, European car registrations almost halved during the first six months of the year.

Demand is increasing, but supply is struggling

Carmakers purchased fewer semiconductors (micro-chips) to match the reduced demand for new vehicles, just as demand surged for home computing, gaming and healthcare products. When semiconductor manufacturers restarted their (reduced) production, the limited volume available had already been prioritised elsewhere. This led to supply problems as automotive markets picked up again. Demand for semiconductor-reliant technology has been increasing, but supply is too low. The semiconductor shortage is a worldwide problem affecting many industries; including the automotive industry.

It may have an impact on your order

Semiconductors are used for both critical functions and in added extras on a vehicle – such as a display, an infotainment system or a sensor. At best, a shortage could cause some trim levels or optional equipment to become unavailable. At worst it could stall production of an entire model line. It is a particular challenge for an industry which tends not to hold much stock inventory. Due to this shortage, delivery times of new cars can be longer, and it may have an impact on your order.

As a fleet manager: How can I minimise the negative impact to my fleet?

LeasePlan is here to support you. Here are some options to consider:

  • Place orders as early as possible.
  • Electrify your fleet sooner because OEMs prioritise low and zero emission vehicles
  • Assess what equipment is needed when ordering a vehicle
  • Explore widening the scope of brands/OEMs in your car policy