[claykin]

Originally Posted by LogicalApex

I agree that the space is extremely competitive and I also agree that BMW wouldn't (and I don't think other manufacturers are rushing to either) decontent their vehicles without valid reasons. But the recent deals between Ford and Global Foundries and GM linking up with Qualcomm and NXP shows that the chip situation won't be returning to the old "normal" in short order. And as we start to see things return back manufacturers will have much more vertical integration -- at least with regards to semiconductors.

We're going to see the availability of chips continue to be volatile. As a result, we'll see automakers continuing to prioritize chips to vehicles that they consider to be higher margin and for them to reduce the chip needs of cars that are lower margin. What that looks like will vary across manufacturers, segments, and models.

Even now the loss of touchscreens on BMWs and the loss of HD radio are pretty visible and sad losses, but there may be more under the hood that makers don't need to disclose to us directly...

On the subject of Qualcomm, BMW is also a partner.

https://www.autonews.com/automakers-...f-driving-cars

[claykin]

JP Morgan also sees some of the semiconductor backlog improving in the near term, but most of the relief not until 2nd half 2022.

https://www.cnbc.com/2021/11/19/jpmo...2022-2023.html

[Germanauto]

What seems the best course of action at the end of a lease now? Buy out the car and ride out the chip shortage? I have two family members with their leases due by next summer.

[claykin]

Originally Posted by Germanauto

What seems the best course of action at the end of a lease now? Buy out the car and ride out the chip shortage? I have two family members with their leases due by next summer.

I also have a lease maturing next summer. I'm unsure and it will be a decision made closer to time to order a car. or I may extend the lease for 3 months and pray. lol

[OM3RTA]

Originally Posted by chassis

They are not.

Agree.

I read a post from a worker at the Toyota engine plant in Wales and they were recently told to expect shortages into 2023.

[Biggie335]

I HOPE this is true - if BMW is still removing things like Touch screens etc from their cars even in March/April 2022 then it doesent look good for anyone planning to order new BMWs for the rest of the year either... Maybe Santa can work some magic over the winter

[chassis]

Originally Posted by OM3RTA

Agree.

I read a post from a worker at the Toyota engine plant in Wales and they were recently told to expect shortages into 2023.

Read earnings outlook statements for 2022 from any public automotive supplier and forget clicking on clickbait stories from Morgan Stanley, JP Morgan, or anyone else.

[GoldfishTX]

Originally Posted by Cos270

As someone working in the industry...no. We are not even close to over. Maybe close to being able to cope with the pain, but we're going to be living with this for a while.

Can confirm.

[FCX5]

Originally Posted by claykin

I sure hope they're right on this one.

https://www.forexlive.com/news/!/mor...-over-20211116

The semi conductor crisis will be over, but that does not mean car companies won't try to extend it. Every single company has been doted from this crisis. You can see it in their earnings reports no matter what they say publicly.

It has also allowed people to pay prices for cars lacking features they would never have bought otherwise.

How is this a crisis when the companies are rolling in money because of this and people are more than happy to pay whatever is asked of them. :

[ChewyLuey]

Interesting take

[plutnicki]

I'm in this industry (building things with which we need semiconductor components) and every day we get a new shortage to try to address. I just had a component issue, where the primary source was at 52 week lead-time. I found an alternate sourced component that would work, which came back with a 78 week lead-time.

I think it's going to get worse before it gets better, with different sectors impacted differently.

[claykin]

https://semiengineering.com/end-in-s...hip-shortages/

[claykin]

Nikkei Asia: Auto chip shortage shows new sign of easing as inventories rise.
https://asia.nikkei.com/Business/Tec...ventories-rise

[mjr24]

I don't think it matters how long the shortage will last. Car companies now see customers will pay more for less and are going to gouge customers for awhile.

[Tommyj]

McLaren have just called Force Majeure and stopped production of P14/16/22 due to semi-conductor shortage.

[BRAKE!]

Originally Posted by mjr24

I don't think it matters how long the shortage will last. Car companies now see customers will pay more for less and are going to gouge customers for awhile.

For a car company, the first thing they (probably) want to do is ramp up production to match demand. They need to sell cars to continue posting profits for share holders as their bottom line - no one wants to invest in a car company with declining sales #s. Selling 2 cars = way more profit than selling one with a mark up (can’t imagine one car’s mark up to be worth 2 car sales). The cars are sold to dealers at an invoice, so regardless of what the car is sold to the customer for, the companies are interested in pushing volume of most models.

Car dealerships on the other hand, have something to gain with increased demand and shorter supply. They can charge arm and a leg above MSRP to make that little bit more above MSRP to increase profits of whatever they have to sell. Perhaps your point can be applied in this scenario where dealerships continue to feign low availability to add “market adjustment.”

[claykin]

Originally Posted by mjr24

I don't think it matters how long the shortage will last. Car companies now see customers will pay more for less and are going to gouge customers for awhile.

Until the 2nd, 3rd, 4th place manufacturer sees an opportunity.

[xlover]

Originally Posted by Germanauto

What seems the best course of action at the end of a lease now? Buy out the car and ride out the chip shortage? I have two family members with their leases due by next summer.

I would imagine that even once automakers/BMW in particluar can secure not just enough chips to restore all options at current production levels but ramp back to ideal production it will still be another 3-4 months before dealer pricing starts to normalize. Will probably take a month or two of unsold allocations before the sales managers give in

[chassis]

Originally Posted by claykin

Until the 2nd, 3rd, 4th place manufacturer sees an opportunity.

+1 this

Competition being what it is, a manufacturer who can put product in front of a consumer will win the day.

And if a manufacturer has a product in front of the consumer with a full feature set, compared to another manufacturer who can't get chips, the full featured product will win, all else being equal.

[ramy2800]

Hopefully!

[heavyD^2]

I think high prices are here to stay for another year as while production will ramp up it will take months before we are at the point were cars on lots are plentiful.

[LookBothWays]

This won't be over until we have us a good ol' fashioned correction. Maybe then the nouveau rich will become a tolerable proportion of the gotta-have-it-at-any-cost buyers.

Might not be far off as I see some of our CEOs are monetizing their stock options at these record levels.