semiconductors and cars shortage

Semiconductor shortage: How to deal with it

2 min to readFleet Management
Given the events of the past few years, no one expected 2022 to be smooth sailing – and the first two months of the year have certainly been tricky for the automotive sector.

With rising COVID-19 cases, staff shortages in many sectors, higher-than-normal inflation and the ongoing semiconductor shortage, the industry faces an array of challenges.  Here, we look at some of the main problems and explore some all-important solutions.

Semiconductor shortages still holding back vehicle production

In 2021, the global chip crisis saw vehicle production drop by nearly 10.5 million units – and the disruption continues in 2022. By the end of February, lost automotive production is projected to exceed half a million units. OEMs entered 2022 with order books at record highs, and some are already quoting vehicle production in 2023. But OEMs are not safe from inflationary price pressures – and they are also heavily exposed to rapidly rising shipping and transportation costs, not to mention the surge in raw material prices. As a result, new vehicle prices are expected to increase this year. 

How to make more chips? Build more plants

Throughout 2021, semiconductor production facilities (or ‘fabs’) were operating at full capacity – and not only that, but they also sold a record number of semi-conductors: 1 trillion. However, competition for semiconductors is fierce across all industries, and demand continues to exceed supply around the world. This is a key challenge facing OEMs as they look to ramp up their supply chain. But good news is on the horizon! Worldwide, nearly 40 new fabs are under (or about to begin) construction. We should start to see the impact of this huge investment – totalling around $150 billion – in 2023, with an improved supply of semiconductors.

Advice for fleet managers

  • I you are fleet manager, place orders as early as possible: 6–9 months before end-of-contract
  • Accelerate fleet electrification: OEMs are prioritizing the production of low- and zero-emission vehicles
  • Assess what equipment you need when ordering a vehicle
  • Consider adding more OEMs to the scope of your company car policy

Think ahead: Book vehicle maintenance in advance

Advice for drivers:

  • Plan services and maintenance far ahead of time to avoid any delays. With shortages of staff and parts alike, it may take longer than expected to get an appointment.
  • Contact LeasePlan for everything related to service, maintenance, repairs or tyres. We’re in constant contact with garages and can help you book an appointment quickly, at a time that suits you.

Business as usual for LeasePlan

While order and delivery times for new vehicles have been impacted in most countries where LeasePlan operates, we’re working closely with OEMs and dealers to get vehicles to our clients as quickly as possible. Our employees are continuously monitoring local supply chains and economic circumstances, and our expert customer service teams remain available for all our drivers – so don’t hesitate to contact us for advice or information.

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Published at March 28, 2022

March 28, 2022

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