You may notice it’s harder to buy a new truck nowadays.
Due to the global supply-chain disruption of computer chips, medium and heavy auto manufacturers aren’t receiving critical parts to produce enough trucks. This has made it difficult to find a fair-priced truck in today’s market.
This article breaks down the challenges many businesses are facing due to the computer chip shortage, why it’s happening, and how equipment financing helps you act fast on available equipment.
Table of Contents
- The Problem With The Computer Chip Shortages
- Long-Lasting Impact on the Medium and Heavy Commercial Vehicle Sector
- The Effects on USA-based Production Plants & Truck Brands
- How Dealerships Are Responding
- Get Your Next Truck Faster with Beacon Funding’s Pre-Approval Program
The Problem With The Computer Chip Shortage
The sparse supply of semiconductor computer chips has stalled American auto assembly lines. During the initial wave of the 2020 pandemic, auto manufacturers canceled large orders of semiconductors when they were forced to shut down.
Now plants are ordering them again.
At the same time, companies across the board are hoarding them – causing a ripple effect throughout the automotive industry.
The timeline for customer orders for a truck used to take weeks. Because of supply chain delays, they’re now taking months.
Long-Term Impact on the Medium and Heavy Commercial Vehicle Sector
There is speculation that prolonged effects of the computer chip paucity may extend into 2022, according to IHS Markit.
Others predict a similar timeline: According to a press release by technology research firm Gartner, the long-term ripple effects of the global semiconductor won’t return to normal until the second quarter of 2022.
“We are looking at couple of years… before we get enough incremental capacity online to alleviate all aspects of the chip shortage,” said IBM President Jim Whitehurst on BBC World Business News.
The Effects on USA-based Production Plants & Truck Brands
Peterbilt and Kenworth
In a statement from PACCAR, the largest manufacturer of medium- and heavy-duty trucks in the world announced in 2021 that their third quarter truck deliveries was short by approximately 7,000 vehicles. Production is likely to remain slow in the fourth quarter.
While demand for their trucks remains strong, they can’t complete enough trucks without the critical chips.
Ford’s Medium Duty Trucks
According to the Associated Press, sales of Ford’s F-Series trucks fell nearly 23% in August.
- Ford announced it slowed production at its Kanas City Assembly Plant for a couple weeks.
- Shifts were also cut at truck plants in Dearborn, Michigan and Louisville, Kentucky.
Earlier this year, General Motors canceled shifts at four of its biggest U.S. factories in Texas after a severe winter storm created dangerous driving conditions for workers. This contributed to the plant’s delay of computer part deliveries even more.
How Dealerships Are Responding
As dealerships see less trucks in their lots, customers are facing higher asking prices.
Truck dealers who were able to sell a good volume of trucks before disruptions are now being limited by the manufacturers. Because of the limited supply, there are no “good deals.”
Instead, purchasing prices are being inflated.
Business owners who are fortunate to have enough cash to buy a truck have little-to-zero negotiating power. Even if buyers wait a day, there’s a line of people willing to pay the inflated price because there aren’t other options.
We don’t like inflated prices any more than anyone else. Our truck experts understand that’s what the market is offering now. While other lenders might turn you away, saying “the truck is overpriced,” Beacon’s credit managers understand that’s where everyone is right now.
Get Your Next Truck Faster with Beacon Funding’s Pre-Approval Program
Equipment financing can put you in the fast lane towards getting the truck you need. In today’s tough market, Beacon Funding understands that trucks are in high demand. With equipment financing pre-approvals within 24 hours, we can help you get your hands on your next truck before it’s gone.
Get pre-approved for your next truck today – there is no commitment, no risk, and you could be approved within 48 hours. We’ll be glad to talk with you about how we can help.