Shortage Of Computer Chips Causing Slow Down In Auto Industry Recovery

PITTSBURGH (KDKA) - There is nothing like that new car smell.

But it's a little bit harder to come by these days.

While many businesses are recovering from the pandemic, the car and truck industry is slower to recover.

Early predictions that the recovery would be well underway by now but those predictions are proving to be a bit too optimistic.

"We're not even close to recovering, some carmakers are a little better but they're not as improved as many thought they would be," says CBS News Automotive Correspondent Jeff Gilbert.

When the automotive industry shut down last year the companies making the computer chips started selling them to others in the electronics industry.

Now, the car manufacturers want the flow of chips to return and the industry has been slow to react.

Gilbert says the manufacturers are trying to adjust.

For instance Toyota.

"Just announced that they are going to be cutting back their global production by 40% in September," he says.

Gilbert explains the reason is the latest surge in the COVID cases has hit the chip plants in Asia.

Domestically Ford is having the biggest issues.

"One of their big suppliers was a company called Renesys that had a big fire at a chip plant in Japan," Gilbert says.

WATCH: How Is This Shortage Impacting Consumers?

"The whole business model, the whole paradigm of this business has really been altered for the better,"
Shults Ford owner Richard Bazzy says.

Bazzy says it's becoming more of a pre-order industry so while the lots may be a bit more sparse, cars are coming in almost daily.

"Every time they come in, they're all pre-sold, so there's no stockpiling," he explains.

Bazzy estimates the wait for an ordered car is about four to six weeks and he says the manufacturers are trying to entice the buyers.

"Ford will actually give you a $1,000 incentive to order the car, we add $500 to that," he says. "So there's a $1500 incentive to order the car."

But Gilbert says it's taking the buyer out of the driver's seat.

"It's a killer on consumers because as a consumer, you don't get any discounts because there aren't that many vehicles so the consumers are the ones taking it on the chin," Gilbert says.

Bazzy views it as evening the playing field.

"It's a wonderful thing, that there's not a wheeling-dealing going on because really, isn't that something, it always bothered me that my neighbor on my left might pay a different price than the neighbor on my right, and I don't like that process," he says.

The used car market is still hot, cooled a bit maybe, says Bazzy, but Gilbert says it's still hot.

"The prices are up. And there is definitely a lot of money out there if you have a used vehicle to sell," Gilbert says.

With the lack of chips, the manufacturers are turning out vehicles, ready to go, except for a chip or two.

"If you go on the Michigan State University campus, they're on break this summer, and you will see a lot after a lot on the Michigan State University campus with partially made Chevy SUVs because again, they're waiting for chips to come in," Gilbert explains. "Ford is going to start shipping, some partially made vehicles that they have stored here around Detroit to dealers and giving the dealers kits later on to complete the production."

Bazzy is ready to take them.

"I mean it seems to be a pretty simple operation, I would take them I would love to have them, and really just to be part of the solution," he says.

As for how much longer it's going to take the industry to fully recover Gilbert says..."for things to get back to normal? Definitely 2022 or later."