Thursday, 11 November 2021 13:37

Shortage of new and used vehicles in the country

Written by Evelyn Alas

Roberto Renderos, vice president of Asociación Salvadoreña de Distribuidores de Vehículos (ASALVE), in an exclusive interview for DINERO.COM.SV, provided statements on how El Salvador is being affected by the new and used car inventory crisis.

Renderos said that salvadorans who need to buy a new vehicle in agency or used cars have to go through a waiting period of approximately up to 6 months to have it, he also stated that costs have increased due to the shortage that manufacturers of semiconductors and auto parts are going through.

The leader of ASALVE expressed that when the economy began to reactivate due to the losses obtained by the Covid-19, the vehicle market began to sell in such an accelerated way that not even the factories were able to keep up with the same pace that was at the end of 2020.

But then the same companies alerted the country that a vehicle inventory crisis was coming because some semiconductor industries had paralyzed their productions.

"Many of them did not hold out and went bankrupt, there were very few left supplying the same amount of vehicle manufacturers and the shortage begins there by the first quarter of 2021 the first announcements are given and this begins to become a crisis", said Roberto Renderos, vice president of ASALVE.

The first quarter of this year began and we found that the supply of some suppliers was starting to get complicated, mainly electronic semiconductors called "Chips".

Likewise, he said that some of the workshops and vehicle brands are starting to close shifts, they are starting to alternate schedules and are looking for solutions to see how to maintain their operations, because they depend on third party suppliers.

According to CNN en Español, an average car has between 50 and 150 chips. In addition, they are used in a growing number of applications, such as driver assistance systems and navigation control.

The media also noted that Volkswagen, Ford, Fiat Chrysler and Nissan were forced in January to adapt production and, in some cases, to shut down plants due to the shortage. The problem continues to plague the industry.

CNN said Taiwan Semiconductor Manufacturing Company, is responsible for the production of about 80% of the microcontroller units used in cars, according to a report by Bain & Co. These parts manage functions such as power windows, brakes and headlights. TSMC is investing US$100 million in advanced chips over the next three years to meet growing demand.