New car sales low due to vehicle microchip shortage

BEATRICE, Ne. - Normally filled with different makes and models, many car dealership lots are currently empty. 

The reason, is one inch of a two ton piece of machinery: microchips. Used for distributing safety features and operating digital touch screens in new vehicles, microchips are in short supply, bringing new car sales to a halt. Jason Zoellner,  is the owner of Zoellner Lincoln-Ford in Beatrice.

"We have 50 some cars built, just sitting in lots waiting to come here, that just need the chips installed to them so they can operate," Zoellner said. "So, they're fully built just missing that chip and the re-program."

Zoellner said his average number of cars on hand is 170 - 100 new, 70 used.  Because of the shortage, currently, that isn't the case.

"Currently we have 5 new [cars] in stock," Zoellner said. "So we're 95 units short."

Despite a lot of blame to the pandemic causing chips to be distributed more for cell phone and laptop use, Zoellner doesn’t believe that to be true for his dealership.

"Blaming it on the pandemic would be wrong," Zoellner said. "There was a factory that burnt down in Japan, so it had nothing to do with China, in this case. The backup factory that supplies us is in Taiwan."

Right now, most cars on Zoellner’s lot, and those nationwide, are used cars. Because of this many buyers are settling for whatever is available, skyrocketing the value of used vehicles.

"Supply is low, demand is high, so the price on used escalates," Zoellner said. "We've ordered a lot of new vehicles, and those ones that are coming in with chips put in them, those are pre-sold, so they come in, and don't even stay on the lot. They're pre-sold and gone."

In order to recover from the loss the chip shortage has brought on, Zoellner’s need for lots of new vehicles, and popular used models, is extreme.

"Ford asked us how many cars we wanted this month, we asked for an additional 71 on top of what they suggested," Zoellner said. "They emailed my guy back asking if that was really wha we wanted, and we said yes. Because that's what we want our stocking levels to be."

 

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