Used Cars See Their Value Rise As Chip Shortage Slows New Vehicle Manufacturing
SOUTH ST. PAUL, Minnesota (FOX 9) – As a computer chip shortage slows down auto manufacturing, strangling market supply, Governor Walz is pushing for federal legislation to help a Twin Cities chipmaker.
“I’ve never seen the market so crazy,” said dealer Ben Footh.
Before the pandemic, Ben Footh had around 150 vehicles divided between his two Footh Auto Sales lots. These days, it’s circulating in around 85. Mainly because the shortage of microchips for new car production continues to mean much higher prices for used cars, and stores like Footh’s are running lean.
“The shortage has driven up used car prices, so incredibly high that a lot of our customers who bought one to four years ago are really doing fine right now,” he explained. “Because their vehicle is, in some cases, not only worth what they paid for but more than what they paid for.”
Governor Tim Walz and DEED Commissioner Steve Grove visited SkyWater Technology in Bloomington on Thursday. The company is increasing production of microchips for a variety of industries, from automotive to medical and aerospace.
The group is also advocating for the US Senate’s recently passed innovation and competition law, which is seen as a huge opportunity for places like Sky Water to increase production even further.
“It’s not just the expansion and the hundreds of jobs and peripheral jobs that go with it,” Governor Walz said. “It’s the security that comes from knowing that we’re making our chips. We’re not at the mercy of what’s going on with the supply chain in Taiwan or elsewhere and we control some of the security here at. United States.”
Footh is closely monitoring any potential help with the microchip shortage and working to diversify its business in all kinds of ways, including maintenance, until new and used car prices return to levels. to which he is accustomed.
“Most dealerships are gearing up for next summer or late fall,” Booth said.