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In a perfectly normal world where there had been no pandemic, things would have gone on just fine. The economy would not have suffered and there would be no shortage of one of the most important things in the 21st century. We are talking about semiconductors or silicon. The thing used to build literally any electronic device. But the world is not perfect and we are in a situation where there was a global pandemic and everything took a major hit. Not just people, but the industries as well.
Due to the shortage of chips, not only computer parts and electronics but even cars and carmakers are the ones struggling to meet demand. As such, even the biggest of giants such as Ford, are experiencing issues. Unless you have a plan to buy a used Ford Explorer for sale, you probably wouldn’t find any new cars without paying a premium or with ease, anyway.
Because of this event, carmakers are not being able to meet the demands of the people, and everything is going haywire. Carmakers are able to finish producing the car, but would you buy a new Ford Expedition without the tech and electronics? No.
As the headline says, Ford is considering asking their dealerships to install the semiconductor chips in the unfinished cars. But why are the cars “unfinished”? Also, if you have been following the market, you might also notice that both new and used cars are priced at quite a hefty premium. Why is that?
Well, the world is suffering from an acute semiconductor shortage. Semiconductors are used to build electronics. They are literally the building blocks of all electronics we use today. Because of the current scenario and the pandemic hitting hard, semiconductor production has taken a severe hit, and thus, electronics are very scarce. They are in high demand, and thus, prices are extremely high. In cars, too, we use electronics. Obviously, you cannot expect a 21st-century car without electronics, can you? Imagine a car with no infotainment system; with no electronics; with no modern safety and driver assistance features. Who would want to buy such a car?
That’s exactly why major carmakers are struggling to produce “finished” cars. You can create the mechanical shell of the car, but without electronics, they won’t work. As a result, the prices are high. Demand is quite high, but supply is not quite there yet. Hence, the prices of automobiles are pretty high.
Well, as you might know, the major hubs of silicon and semiconductor production are China and Taiwan. Most of the world gets its supply of electronics from this part of Asia. However, because of the pandemic, people have been forced to stay indoors.
A semiconductor is not something you can manage to create by working from home. Due to fewer staff working in the factories, production has gradually decreased. Also, due to work from home now being a thing of its own, electronics have been in high demand; but the supply just couldn’t keep up with it.
As a result, the world is hit with a massive semiconductor shortage. These things can only be manufactured in special “foundries”, of which there are a chosen few in the world. This further adds to the fact that chips are in dire shortage. So, our beloved cars are struggling to make it to the dealerships without having a major deficiency.
Ford is in a weird situation, along with all other automakers. They are also struggling to meet their supply of semiconductors chips. But they did not stop production. Ford does not need the semiconductor chips to create the mechanical part of the vehicle. The vehicles are being manufactured, but without the crucial chips, they are thoroughly incomplete.
Because of the production going on continuously, Ford cannot exactly sell these vehicles, as they are unfinished. They are rather waiting for the supply of semiconductor chips to replenish. Once they arrive, install them, and the vehicles are good to go. So, what is Ford doing with these “unfinished vehicles”? Well, they are storing them in their lots across several states. But the lots are being filled up soon too.
Now, Ford is considering actually shipping these unfinished cars to the dealerships. They are asking the dealerships to install the chips on their own when the stock arrives. Ford is mainly following this approach to releasing the build-up on their storage lots so that the factories can keep running and they can keep producing new cars.
There are technicians in the dealerships. Ford is considering these technicians to take on the task of installing the crucial chips when they arrive in stock. Of course, they would be trained specially by Ford for their endeavors, as reported by Automotive News. Ford would also be compensating the dealers for installing the chips, with an hour’s worth of labor per vehicle.
However, we don’t know how the dealers or the general public would feel about this move. Would you want a crucial part of your car to be installed by a technician in a dealership rather than coming finished from the factory? You also cannot blame Ford entirely here, since they need to keep their business running. But the approach they are considering might cause issues of responsibility or liability. If there is a problem with the semiconductors, who will take the responsibility? Will it be Ford, or will the dealership be the one to blame? Most technicians might not want to take on this job altogether.
Ford, along with other automakers, is in a dire situation. Perhaps they could cut down the production of vehicles and wait for the stock to replenish? However, we don’t know how that might financially affect the company. Everyone looks for profit. While Ford surely wouldn’t want a lawsuit regarding this, they are still considering this as a possible option. However, nothing is concrete as of yet.
A Ford spokesperson reported to Car and Driver, “We are exploring a number of different options as we work to get our customers and dealers their new vehicles as quickly as possible.” We just have to wait and see the move they make. There are quite a few issues with such an approach, but if done correctly, it could both help the company and the people get their vehicles on time.
