From SPACs to chips: Five ways 2021 may have forever changed the auto industry

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The automotive industry may never be the same after 2021, an infamous year that brought massive changes sparked by supply chain issues and the coronavirus.

Vehicle inventories

Dealer inventory levels across the country remain extremely low due to a semiconductor chip shortage that has led to sporadic plant shutdowns and depleted vehicle inventories in 2021."The challenge is it's a fixed asset industry and we have a core history of backsliding and producing more because the temptation is always there to cheat, produce one more unit because of the cost efficiencies," he said.

J.D. Power reports about 89% of new vehicles bought by consumers sold near or above the manufacturer's suggested retail price, also known as MSRP or sticker price. That compares with 12% in December 2019.

 

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So, automakers lowered forecast demand of cars, resulting a chip shortage when demand remained high. And now their response is that even when it recovers, they are going to reduce inventory by 1/3 to keep prices artificially high to maximize their profit at consumers expense. Win

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