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How Honda Has Been Impacted By The Chip Shortage

How Honda Has Been Impacted By The Chip Shortage

If you’ve been shopping for a new car lately, it’s no secret that there is low inventory. The entire auto industry has been hit hard by supply chain issues, especially involving semiconductors or microchips.

Honda and many other carmakers have been short on the supplies needed to manufacture automobiles, causing them to scale back production or even halt manufacturing until supplies are available.

The current supply chain issues have led to vehicle supply issues at dealerships. Low inventory on dealership lots is common across the country and vehicle brands. New and used cars are even becoming more expensive to buy due to supply and demand forces.

Here’s what you need to know about the current supply chain issues, vehicle inventory shortage, and the impacts on Honda dealers like Columbia Honda:

What Are Microchips?

Microchips or semiconductors are small transistors made from silicon that are utilized in everyday electronic devices ranging from your smartphone and computer to cars and trucks.

Automobiles are increasingly becoming like computers on wheels, and microchips power modern cars’ advanced features and technologies. Not only are advanced driver-assistance and safety systems run on semiconductors, but so are touchscreen displays and many other convenience and comfort features that motorists enjoy every day.

With these chips in short supply, something had to give, which means strains on vehicle manufacturing output until supply shortages are fully sorted.

Why Is There A Semiconductor Shortage?

The pandemic has profoundly affected our world, from global health and the economy to supply chains. After the novel virus began spreading from Wuhan, China, sometime in 2019, much of the world soon went into severe restrictions and lockdowns of varying lengths that took a toll on the global supply chain.

As demand for new cars dwindled during the early months of the pandemic in 2020, car plants reduced orders for semiconductors. Meanwhile, demand jumped for consumer electronics like laptops and desktop computers, smartphones and home entertainment devices. Microchip manufacturers shifted production toward where demand was needed and away from carmakers.

Now that demand for new cars has normalized, automakers cannot yet get the steady supply of semiconductors needed to increase vehicle production.

How Has Honda Been Affected By The Chip Shortage?

Due to the chip shortage, Honda had to cut vehicle production in 2021. However, all of its North American manufacturing plants were back to normal production by April 2021. Most of Honda’s truck and SUV models saw recent sales records even with these production setbacks.

Like other carmakers, Honda has had to cut back in areas to maintain stable vehicle manufacturing throughout the supply chain situation. Many Honda parts are still in short supply. So, the automaker is handling all vehicle production and parts supply issues on a case-by-case basis.

Shop Honda Cars For Sale In Columbia, MO

Columbia Honda is always here for Columbia, Missouri, area motorists. Our team of helpful Honda sales specialists is eager to assist in your new Honda search and acquisition.

We are committed to providing our valued customers with a top selection of new and pre-owned Honda automobiles at driver-friendly prices. Be sure to shop our ever-changing inventory, so you don’t miss out on your dream Honda!

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