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When The Chips Are Down
Why industry must change in a way few have yet realized
As the world slowly begins to unwind from eighteen months of media-induced coronapanic, the world’s automobile manufacturers are discovering they are unable to make as many vehicles as customers want to buy. For popular models such as the new Ford Bronco, estimated delivery dates have slipped by more than a year, and for less popular models there are no delivery dates available because the manufacturers are prioritizing their most profitable vehicles and suspending production of other models.
Worldwide, the gap between desired production levels and feasible production levels in 2021 is being estimated at between 5 million and 9 million vehicles — which is nearly the entire output of VW or Toyota in a normal year, and more than the combined output of Ford and GM. Meanwhile minnows like JLR are looking at production shortfalls of 50% or more. No manufacturer can take advantage of the situation to gain market share because each one is hamstrung by the same problem. The result: an enormous increase in used vehicle prices, a dramatic shortage of product in the rental car industry, and millions of customers reluctantly waiting for cars they thought they’d be driving months ago.
The reason for this situation is simple: over the last thirty years, automobiles have…
