Here are the real reasons why the waiting times for the Toyota LandCruiser, Kia Sorento and other new 2022 vehicles are still awfully long.

From chips to ships to sick workers, there are several reasons why you find it impossible to buy a Land Cruiser.

Have you tried buying a new car right now? For some models, like the Toyota Landcruiser 300 and RAV4 or Volkswagen Amarok, you'll have to wait many months, perhaps up to six months or even longer, to get high-demand options.

Think you can avoid this by buying something underused instead? In a way, this is the worst thing you can do. The used car market has taken notice of the shortage of new cars, and private sellers and used car dealers alike are indulging in good old price gouging, especially on SUVs and SUVs. Thinking about buying a Suzuki Jimny in the used car market? Don't do this unless you're willing to pay a five figure premium over retail.

But why, two years after the start of the pandemic, cars are still so few? Is the pandemic still to blame? The answer is simple: “because computer chips”? Oh no. The situation is a little more complicated, but to understand why, we first need to understand how automotive supply chains work.

A chain of weak links

Everything is connected. Everything. There is no slack in the global supply chain either. When the supplier abandons his part of this metaphorical chain, the consumer will also feel it on their side.

Much of this has to do with the industry practice known as just-in-time manufacturing, also known as lean manufacturing. First developed by Toyota in the first half of the last century and adopted by virtually every car manufacturer since then, it has enabled automakers to move away from maintaining large inventories of parts, assemblies, and raw materials and instead ensure that the quantity of parts ordered from suppliers matches their quantity. parts actually needed to produce cars, no more and certainly no less. It has eliminated waste, led to a much more efficient supply chain, increased plant productivity, and when everything is working as it should, it's practically the best way to get cars together at an affordable price.

However, this is not a system that is particularly resistant to failures.

Thus, in order to minimize the risk of stopping the entire assembly line due to the fact that one supplier could not work together, automakers will use the so-called "multisourcing". From tires to individual nuts and bolts, a component rarely has only one source, and often there will be multiple if the part is widely used on a production line for multiple models. The end consumer will not know if the plastic for their doors was supplied by Supplier A or Supplier B - quality control ensures that they all look and feel the same - but this means that if Supplier A has problems on their own assembly line, Supplier B can intervene. and make sure enough door plastic goes to the car factory to keep the line open.

Suppliers A and B are known as "Tier XNUMX Suppliers" and supply the automaker with finished parts directly. However, big problems can arise when all these first-tier providers use the same provider for their raw materials, which will be known as a second-tier supplier.

And that's basically the situation when it comes to just about everything electronic in a car. If an automotive part requires a microprocessor of any description, then the sources of silicon chips that make up these microprocessors are ridiculously centralized. In fact, only one country—Taiwan—accounts for the lion’s share of silicon chips (or semiconductors), with a whopping 63 percent of the global semiconductor base materials market, with the vast majority coming from one company: TMSC. When it comes to the production of finished microcircuits and electronics, the USA, South Korea and Japan occupy the majority of the market, and only a handful of companies in these regions supply microprocessors to almost the entire world.

Naturally, when second-tier microprocessor suppliers slowed down due to the pandemic, so did their customers—all those first-tier suppliers. Due to the lack of diversity at this end of the supply chain, multiple sourcing practices were not enough to keep the assembly lines of the world's automakers running.

The situation has worsened as automakers failed to anticipate continued high demand for cars during the pandemic, but even as some automakers are moving away from cars to reduce the number of chips needed (Suzuki Jimny, Tesla Model 3 and Volkswagen Golf R two recent examples) there are other factors…

The situation with the ship

Speaking of fragile ecosystems, the world of global shipping is as full as car manufacturing.

Not only are maritime freight profit margins surprisingly small, but containerized ships are also incredibly expensive to operate. With the pandemic disrupting supply chains but also sparking unexpected demand for consumer goods, the flow of ships and containers has been severely disrupted, leading not only to massive delays but also to increased shipping costs.

The bulk of consumer goods come from China and Southeast Asia, and when goods are shipped from that part of the world to another, the containers that carry that cargo are usually refilled with products from the destination country and reloaded to another. A ship eventually returning to Southeast Asia to complete the cycle again.

However, due to the high demand for Chinese-made goods, but limited demand for goods that go in the other direction, a whole bunch of containers ended up parked in ports in America and Europe, and the ships then sailed back to Asia with little or no cargo on board. This disrupted the distribution of containers around the world, leading to a shortage of containers in China, which then led to massive delays in the shipping of everything that is produced in this region - both consumer goods and raw materials, some of which were needed on production lines. cars.

And, of course, since modern production lines only run when parts are delivered just in time, this causes many assembly plants to sit idle waiting for components and materials to arrive—components and materials that aren't necessarily among the first. with chips inside.

You can't build a car at home

If you are a white collar worker, the work-from-home mode is probably a blessing. If your job requires you to work with tools in a car assembly plant, well... it's not like you can put together a Kluger on your kitchen table.

Notably, despite this, many industries have been able to continue operating throughout the pandemic, however, while factory workers in many parts of the world are still able to work with tools, there has still been a certain level of interruption in their workflow.

First, companies had to make workplaces safe enough for their workers. That means reconfiguring workplaces to accommodate social distancing, installing screens, ordering personal protective equipment, reorganizing break rooms and locker rooms—the list goes on. This process takes time. Working in shifts with fewer staff has also been another worker safety strategy, but it also has an impact on productivity.

And then what happens when there is a flash. The latest breaks in Toyota production were mainly due to the fact that workers fell ill: just four cases were enough to close the company's plant in Tsutsumi in Japan. Even if factories don't shut down when someone gets sick, worker absenteeism due to quarantine still impacts factory productivity due to how widely the COVID-19 virus has spread.

So... when will it end?

There is no one central reason why cars are hard to get now, but there are many interconnected reasons. It's easy to blame COVID-19, but the pandemic was just a trigger that caused the house of cards, i.e. the global car supply chain, to collapse.

However, in the end, everything will be restored. There is a lot of inertia in things like microprocessor manufacturing and global shipping, but the prospects for recovery are good. However, it remains to be seen how the industry will insulate itself from a repeat of this scenario.

As for when the recovery will take place, it is unlikely to happen this year. In short, if you can afford to wait a little longer to buy your next car, you may be saving money and reducing your waiting time. No matter what, don't give in to these egregious secondary market speculators.