car sales

Local car importers are having to put customers on waiting lists as long as nine months, as the global chip shortage has taken a toll on the automotive industry.

All dealerships spoken to by Businessnow.mt said the supply chain crisis – specifically the semi-conductor shortage – meant they had no choice but to tell customers they had to wait a while to get their hands on a new car, whether a Renault or a Porsche.

Indeed, even in the case of ultra-luxury vehicles such as Porsche, it appears that it is not increased demand causing the waiting times, but rather the increased use of semi-conductor chips.

“A modern car has as many as 1,000 chips in it,” a representative of Continental Cars said.

A representative of Kind’s Auto Sales Ltd noted that, because it was a small market, Malta has always had issues with supply, while adding that some brands had managed the situation better than others.

The chip shortage has further exacerbated problems faced by an industry already hit hard by labour shortages, natural disasters and COVID-19 shutdowns.

Indeed, automotive giant General Motors’ third-quarter earnings were down roughly 40 per cent compared to the same period last year.

The industry is also at a technological crossroads.

“We’re moving to electrification, and electric vehicles have more chip content – high-tech chip content. But because we only account for around eight per cent of the global market for chips, we don’t have much purchasing power,” said Kristin Dziczek, the Senior Vice President at the Center for Automotive Research.

And while local importers have been told by their suppliers that the shortage should be resolved by the second or third quarter of next year, some international analysts predict the problem could last well into 2023.

The car industry is by no means the only sector hit by the chip shortage. Electronics and white-goods stores in Malta are also facing supply issues ahead of Black Friday.

Related

Hotels report strong 2024 so far, optimistic about a very busy summer

May 18, 2024
by Robert Fenech

Trends are shifting in the preference for last-minute bookings, hotels say

Labour Party European Parliament manifesto: What’s in it for businesses?

May 17, 2024
by Anthea Cachia

Looking ahead, Prime Minister Robert Abela pledges new opportunities on the commercial and social sphere

WATCH: MEPs in dialogue – Enhancing Europe

May 17, 2024
by Helena Grech

The fourth in a series of debates designed to engage citizens in the lead-up to the MEP elections