New cars in Pittsburgh in short supply as microchip shortage persists

PITTSBURGH — Purchasing or leasing the new car of your dreams might prove challenging in the months ahead, as dealers face unprecedented supply issues.

“It’s something we just never would have even foreseen,” said Mike Engle, general manager of Jim Shorkey Auto Group.

It’s a problem impacting dealerships nationwide, and it’s caused by a global microchip shortage.

“They run everything from the infotainment system to blind spot monitoring, back up cameras, everything that we want in our vehicles now, are all the result of these microchips,” Engle said.

Engle said certain manufacturers have been impacted more than others.

For some, new car availability is down 70%, while others are down 40 or 50%. Several manufacturers have cut back on incentives, meaning you could pay more for a new car than anticipated.

“Overall, it’s a tight supply,” said Mark Smail, one of the owners of Smail Auto Group in Greensburg.

Smail said some manufacturers are simply ordering the retail units that customers want. “They’re prioritizing those instead of for stock units, so it’s maybe a shift in how we’re going to retail cars too going forward,” he said.

Both Smail and Engle, however, told Channel 11 it’s still a good time to buy a new car and a great time to trade in a used vehicle.

“People who are coming in and turning in a lease in June or July are going to find that inventory is really short so selection is less, but on the positive side, their trade in value could be 20, 30 percent higher than it’s ever been,” Engle said.

“Yes, it’s very, very hot,” according to Smail. “A lot of people are trying to find used inventory for their lots, even the rental companies are looking for used cars to rent out, it’s just a very short supply of autos right now in our industry.”

As for a solution to the supply issue? President Joe Biden recently addressed the shortage during a summit, saying the United States must invest in chip infrastructure.

NBC News reports that chips today “largely come from places like Japan, South Korea, Taiwan and China.”

Smail agrees. “We need to get chip manufacturing plants in the United States, made here by Americans for the automotive industry.”

In the meantime, Smail predicts it won’t be until later into the third quarter or even fourth quarter when production picks up to what it once was. Engle believes it could be even later before things are back to normal, perhaps into the first quarter of 2022.

The microchip shortage isn’t just impacting auto production but electronics and appliance manufacturing, too. The pandemic has also prompted a spike in demand for certain products, resulting in low supply, which Channel 11 will be covering in the weeks ahead as part of a “summer shortages” series.