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A closer look at how the microchip shortage is impacting car dealerships in the Coastal Bend

You may have noticed that the local car dealership lot you pass on the highway looks a little scarce these days, here's why.

CORPUS CHRISTI, Texas — You may have noticed that the local car dealership lot you pass on the highway looks a little scarce these days, well that’s partly due to the massive shortage in microchips needed to manufacture new vehicles.

3News spoke to Charlie Hicks, dealer principle of the Hicks Automobile Group for more insight on how that affects us locally.

Charlie Hicks says the automobile industry began experiencing the negative impact of the pandemic when uncertainties led to immediate productions cuts. 

“We couldn’t bring people together to produce cars, factory workers were kept out due to restrictions being in place, so production was significantly reduced,” said Hicks. 

But according to Hicks there was other additional factors other than the pandemic that played a part in the current shortage of new vehicles for sale. 

“All of a sudden there was a semiconductor fire at a Japanese plant, the cold snap in Texas in February where there is a lot of semiconductors made for the industry. That collided with a smaller ramp up from COVID now we have production reduced not by choice, but raw materials are just not available, "said Hicks. 

Hicks says, this not only affects the dealership, but the customers as well who don’t have as broad a selection when shopping for a new vehicle. But Hicks says there is one upside to this situation for customers. 

“What’s happened as of a result of the new car inventory levels being low is used car values have come up, it’s almost a perfect storm because their preowned vehicle they currently owned is worth more than it was 6 months ago,” said Hicks. 

Hicks says this is just a transitional period and he expects the industry to get back to normal supply levels starting with the next 90 days. 

“The chip will come back online, and the raw materials will start to catch up by the 3rd quarter we will see supply ramp up and by the 4th quarter the market will stabilize,” said Hicks. 

For the latest updates on coronavirus in the Coastal Bend, click here.

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