How the semiconductor shortage will impact auto lending in 2022

Semiconductor supply chain issues caused major headaches for auto lenders throughout 2021 and vehicle production continues to suffer into 2022. In this blog post, we’ll take a deep dive into how demand for computer chips is expected to impact auto sales in the coming months.

Tracking the Chip Shortage

When the pandemic first began in March 2020, almost all major automakers, including GM, Tesla, and Fiat Chrysler, cut way back on output. Initially, this was in anticipation of lower sales due to changing consumer demand in the first months after the pandemic. This was soon coupled with manufacturers closing facilities to prevent the further spread of the virus among their workers.

After slacking somewhat, consumer demand for automobiles shot back up in 2021. Unfortunately, new car manufacturers could not ramp production up quickly enough to keep up with this renewed demand because the semiconductors needed to build the computer components in their vehicles were in critically short supply worldwide.


continue reading »