CORPUS CHRISTI, Texas — Among the bills President Joe Biden is expected to sign next week is the CHIPS and Science Act. The result of the bill will hopefully increase new car production.
“It has been absolutely crazy,” General Manger of Mike Shaw Toyota, Cory Brewer said about the last few years.
Since the beginning of the pandemic, it’s been hard for car dealerships. Their lots have been looking a little barren.
New cars have not been consistently flowing into Mike Shaw Toyota.
The CHIPS and Science Act provides $52 billion for semiconductor chip manufacturers, the key piece to new cars.
Congress isn't just handing over a check. The money will be used for subsidies and tax credits to build new facilities, or expand, solely in the United States.
“Hopefully there will be enough chips to catch things back up to where we can get a normal supply of new cars,” said Brewer.
Because there’s been no supply of new cars, there’s been an adverse affect on used car prices. On top of that, people hadn't been trading in cars, so supplies dwindled.
“It has impacted the cost of used cars," Brewer said. "Used cars have almost doubled. And, I believe as soon as the chips come back, the production should come back up on the new cars and things should level out.”
New cars won't pop up right away. Service director at Mike Shaw Toyota Jeff Barlow said each brand has their own way of distributing cars.
Barlow said, in 2020 and 2021, Ford made about 400,000 trucks and distributed some of those to dealerships without semiconductor chips. Once chips were made available, they sent them out.
“Toyota on the other hand, won’t build a product, or build a car, until they have all the components," said Barlow.
Another hold up that remains are supply chain issues. While Barlow said it's gotten a little better, servicing vehicles has been a waiting game.
"We're still getting things done, it just takes longer," he said. "Our supply chains are more challenging, if you will, then they used to be. It takes two to three weeks when it used to take two to three days."
Brewer said unfortunately, results might not be seen from this until late in 2023.