Semiconductor shortages impacting Houston

According to estimates compiled by DesRosiers Automotive Consultants (DAC), Canadian auto sales fell 19.6 per cent in September from a year earlier as vehicle shortages caused by semiconductor supply issues continue to weigh.

Canadian light vehicle sales totalled 136,584 in the month, down from 169,876 last year. DAC says the seasonally adjusted annual rate of sales came in at an ‘undeniably weak’ 1.55 million.

Andrew King, managing partner at DAC, says there have been dramatic divergences in sales performances between companies due to shortages of semiconductors, specifically, microprocessors.

A microprocessor is essentially a small component of an integrated circuit, which is a piece of a a semiconductor chip. The semiconductor chip enables a variety of vehicle features such as power steering, backup cameras and emergency breaks.

Houston Today spoke to Murray Sullivan, General Manager at Sullivan Motor Products LTD. (SMP), who echoed that the lack of microprocessors is the source of the problem.

“In terms of sales, the year in a whole actually has been quite good, though we’re coming to a bottle neck now where everything is pre sold meaning it doesn’t sit on the lot, that’s the way business is going to be going for the next year due to the shortages of microprocessor,” said Sullivan.

“Usually we have anywhere from 9 to 12 million dollars in inventory. Right now we have $100,000. We have 70-75 orders built, but about 50 per cent of them are waiting for microprocessors.”

Sullivan says that pre sold orders are the new way of doing businesses for SMP for the time being to combat the issue caused by the lack of microprocessors.