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The global chip shortage is starting to have consequences

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581–590 of 741 posts

Re: The global chip shortage is starting to have consequences

#581
post #210

Earlier quoted context omitted.

It is going to come sooner than that, people keep talking about inflation "coming soon" I think those people are blind because it is already here. Right now if we just get off with a little stagflation that would be a blessing, unfortunately I think it is going to far far worse. All those people depending on government checks are going to get hit hardest by the combination of inflation and the required austerity meas…

The economy is projected to grow quickly in 2021 though and even 2022 is projected to grow 3.5% which is still higher than trump's 2.5% average. The debt burden may shrink from sheer growth alone.

Those projections are based on Modern Monetary Theory and Keynesian modeling....

Sorry to say I so not support either one of those economic schools of thought... Time will tell who is right

To believe we can just create from thin air 6+ trillion dollars in 18 mo's and plan to create 4-6 trillion more it will not result in massive inflationary pressures is a folly.

You might be right in the debt disappears, because people will be buying bread with figurative wheel barrow's of money as the dollar collapses...

grated that is the worst case, but these rosy predictions that everything will just continue on with no more than 3% inflation is lunacy at the highest order. We are seeing massive inflation in many market segments all being labeled as "shortages" for other reasons than currency problems. 400% in lumber,300% in food, etc. I submit it is not only shortages driving those numbers

Re: The global chip shortage is starting to have consequences

#582
post #221

Earlier quoted context omitted.

Do pick up trucks cause more accidents? Is there data that supports this?

Or are modern pickup-pedestrian accidents more deadly than other classes of cars?

I'm guessing the answer to your question is "yes" but I don't know how much insight this gives to GP's question.

Re: The global chip shortage is starting to have consequences

#583

Earlier quoted context omitted.

Yep. I noticed that as well when I bought my 2018 Corolla. The size comparison to a 2003ish Camry is very similar. 2003 Camry: 189″ L x 71″ W x 58″ H 2018 Corolla: 183″ L x 70″ W x 57″ H

Doesn't this prove the point that cars are growing? The modern "compact" corolla is the same size as the "midsized" from 15-20 years ago.

Ah yes it does and that was my point and I misread OP.

Re: The global chip shortage is starting to have consequences

#584
post #248

Earlier quoted context omitted.

I definitely agree that car size inflation is a real problem. Cars are too big and getting bigger every year. That said, "good visibility" is not a replacement for safety tech. The sensors and cameras in a car are always going to be better at spotting danger than a human for things like blind spot monitoring and backup cameras. You sound a bit like the teachers that would drill mental math because "you won't always h…

> Cars are too big and getting bigger every year. /me waves from my tiny Corolla, slightly larger than my 2002 Prius, which a Camry has shrunk in size to meet relative to the 2009 model.

The Toyota Corolla has grown 8 inches longer, 4 inches wider, and a full 500 pounds heavier from 2001 to 2021. It may be a small car by today's standards but it's as big as mid sized sedans used to be.

https://www.caranddriver.com/toyota/corolla/specs

https://www.autoblog.com/buy/2001-Toyota-Corolla-CE__4dr_Sed...

Re: The global chip shortage is starting to have consequences

#585
post #337

Earlier quoted context omitted.

> Most new cars still suck / Do not offer meaningful new features. In terms of bells and whistles? Yeah, not that much. But in terms of safety tech, there has been a huge progress in last 10 years and it’s not slowing down. New cars are not only getting harder to crash, but in case of crash they’re getting better and better at protecting you. Safety is main reason why I update my cars every few years, even tho it’s p…

A couple of days ago I was watching a dramatic video showing test collisions of old cars vs modern cars. I was surprised by how much safer a 2016 car was than a 1992 car. Not to mention the 1959 death trap Bel Air. (It's alarming though that 1992 is now the olden days.) https://www.youtube.com/watch?v=TikJC0x65X0

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Re: The global chip shortage is starting to have consequences

#586

Earlier quoted context omitted.

Because it would ultimately be paid for by the public.

I guess this would be similar to the way a lot of sports arenas are built. The public foots the bill to build it, and the team gets a cheap 20-year lease to use it. And the public the gets a sports team.

The public foots the bill, and the owners of the team profit handsomely from selling the public the chance to watch the team play in the stadium they already paid for.

Sports arenas built with public money are a scam, and so is the idea of having taxpayers subsidize the construction of for-profit privately-owned chip fabs.

Re: The global chip shortage is starting to have consequences

#587

Earlier quoted context omitted.

I'm not saying things couldn't work differently, only that the incentives don't align to make that very easy to accomplish. Tesla did it because they had the advantage of looking at the current status quo and saying "Yeah, no thanks, we'll retain control of whole process." I get what you mean about certain aspects, but I would not describe the process of buying a car in that way. I don't know what you mean. I don't t…

> Unless you really insist on driving the exact car you're buying I certainly do. I thought this was the norm?

Here's full info dump you might find interesting:

Regarding your comment on test drives: Not in my experience, though it may vary between dealerships and also possibly luxury class. Side note: a good part of my knowledge comes from my father who, when he fell on hard times losing a much better job, could only find a job selling cars. (He wasn't good at it: He was blunt & honest, and while not afraid of pushing an upsell, he wouldn't use deceptive tactics.)

For test drives, luxury car dealerships or high end models at normal dealerships will get you an easy test drive in the exact car you're buying. For a "normal" cars they'd prefer or insist on their dedicated car for that purpose. Part of the reason some dealerships do this is because it's they will use a model with the highest level of options for that model-- all of the amenities. It makes the upsell easier when a customer realizes that some of the nice things they experienced in the test drive aren't included in the "trim" they want.

A customer can insist, but the way they pack cars into their lots it can take a little while for someone to maneuver cars so the one you want can be brought out for a test drive. The only time I test drove the exact car I was buying was when it was the only one on the lot with a specific requirement: manual transmission. Otherwise I drove what are called "demo cars". If you search that out, it's a common thing: Dealerships designate specific cars for test drives, which are also occasionally used by sales folks to get them familiar with the cars, and also as loaner cars to customers that need to leave their own to be serviced. You can usually get a slightly better deal on demo cars: Technically they can still be sold legally as "new" but can have up to a few thousand miles on them.

As I said though, it could vary by dealership, but it will especially vary by how busy it is when you visit: Weekends are when sales folks really make their money, and unless you're really ready to buy right then, they will try not to take the time even for the test drive unless things are slow: if they establish that you might not be ready to buy that their goal is to spend the smallest time possible that still connects you to them if you decide to buy later, but otherwise lets them move on to a customer who is really ready to buy, because: They mostly need to sell 2-3 cars on the weekend, and 1-2 cars over the course of the rest of the week to meet the lower end quota marks ~12 cars/month where small bonuses start to kick in, which is also where most salesmen land each month.

Also, despite cars being a large purchase, sales folks are paid like shit compared to the sticker price, have to work extremely long hours, and have no such thing as true paid vacation or sick days because if they take a week off, they're giving up 25% of their pay for that month. More, if it means they fall a car or two short of a bonus tier. $100-$200/car is around average for entry to mid-range cars, with a small % earned on upsells like an extended warranty and the interest earned on the loan. IIRC, that commission is about 5%: $1k for an extended warranty and $2k interest over the lifetime of the loan gets them an extra $150, but most people don't get the warranty extension and frequent 0% to 2% financing deals for people with strong credit make those extras few & far between. Salary breaks down along these lines:

1) ~50-60 hour work weeks with a pre-commission "salary" around $1000/month.

2) ~12 cars/month averaging $200/car after upsells = $2400

3) $500 bonus for hitting the minimum quota

4) $1000 + $2400 +500 = $3900/month = ~$45000/year for a job with low benefits, variable uncertain pay from month to month, zero fully paid time off, and long hours.

Again, this is for a typical dealership like honda/chevy/toyota etc. Higher-end luxury cars are very different. They have to cater to more demanding buyers. Those dealerships generally only hire sales folks with strong established track records with high sales rates. Salaries there can be $75k to $100k. I have a family member that was able to start at that level due to a friendship connection, did very well, and moved up to ultra luxury & sports cars and began earning ~$200k/year. That, however, it the top 1% of car sales.... maybe even less. Not that many people buy >= ~$150,000 cars. But when they do, the margins are higher, buyers often want a variety of upsell amenities, and even low-interest financing results in a lot more profit on the back end: $1500 commission/car plus $600 on the back end for financing @ 10 cars/month = $200k/year.

Re: The global chip shortage is starting to have consequences

#588

Earlier quoted context omitted.

>> Since 14% of renters are behind on rent and evictions begin June 30, aren’t vehicle repossessions going to kick in July / August? Americans will pay their car loan before their rent.

You can sleep in your car but you can't drive your house or apartment.

I think about this fact a lot considering the growing anti-car movement on certain parts of Twitter. Huge misconception about the value of cars, especially for people in America who don't live in extremely dense cities.

Something which doesn't need much maintenance, like a Honda or Toyota or something, is a lifeline. Fuel is still relatively cheap; modern cars are twice as efficient as similar cars from ~40-50 years ago. Housing has skyrocketed in that time compared to income. But a car is often a pre-requisite for many jobs. And with Uber/Lyft/door-dash, etc, a car can enable you to almost immediately get a modest job in most cities in the country. And it's easy to move to a new city if you have a car, as it functions as your own private room (even if you have to crash on a couch... or sleep in a Walmart parking lot). They also mean you don't need to rely on local 7/11 or delivery services for food. You can go buy in bulk, shop across town. A car gives you optionality and security. Wise or not, we've built our nation around cars, and now cheap used cars with affordable fuel are basically our main safety net.

Re: The global chip shortage is starting to have consequences

#589
post #98

Interestingly, there is an embedded video in that article that explains the issue specific to the automotive shortage - it's because the automotive industry cancelled a lot of chip orders in anticipation of low vehicle demand and that caused chip makers to reduce their production for the kinds of chips that go into cars, and now it takes time to ramp back up: https://www.cnbc.com/video/2021/03/02/how-the-global-compu…

Since 14% of renters are behind on rent and evictions begin June 30, aren’t vehicle repossessions going to kick in July / August? Presumably, due in part to eviction protection, they have been able to divert all or a portion of their rent payments to keeping up with bad car loans for commute vehicles that often will not be needed. These folks need them for housing unfortunately. If repossessed cars start showing up t…

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Re: The global chip shortage is starting to have consequences

#590

Earlier quoted context omitted.

I get that this is a potential big problem, but I had to stop reading when the dog washing company blamed needing to respin a new board on a chip being out of stock due to this. I'm sorry, but if you aren't buying enough chips to build all the boards you want to build of a revision, this is just what happens, chip shortage or no. Stuff gets obsoleted all the time, it doesn't take a chip shortage. Blaming a black swan…

Chips shouldn't go obsolete so fast. Your local auto parts store has in stock parts for cars made 50 years ago. That include aftermarket parts made in the past few years. You cannot support right to repair if you support the idea that chips go obsolete.

A few things help the auto part example over consumer electronics

* the model was setup while the auto makers were substantially smaller. GM / Ford couldn't hope to control the entire supply chain in the 1930s like they can now. These pre-existing businesses are able to protect their interests.

* Early cars had massive defect rates compared to modern consumer electronics. You HAD to be able to have a large number of people able to repair and maintain cars.

* Due to the value of cars, a higher proportion of damage is likely to be considered repairable over a CE device.

* Many auto parts were simpler when the model setup. Many parts did not have extensive IP protections, and were relatively easily clone-able. (i.e. you can make a mould of a part and cast other copies). Not to mention, outside a few halo proprietary technologies, companies were less litigious and protective of IP.

* Commercial operators such as Taxi and corporate fleets mean that there was a market for these 3rd party products, enough to cover R&D costs of cloning an existing part.

I think we need to enforce a compulsory licensing of IP for all parts, chips, etc after a period of non-availability or obsolescence. Price should be set at a point where 3rd party companies come in and produce generic versions, paying royalties to the owner. Allow these 3rd parties to reverse engineer the products and sell their clones if there is truly a market need.

What will likely happen is that the companies would rather license their designs to a chosen partner, in the hope of having more control over it

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