Microchip Shortage Disrupts Automotive Supply Chain in the UAE

Microchip Shortage Disrupts Automotive Supply Chain in the UAE

A new study by Drive Ninja reports only 36% of new car models are currently available to buy

A new study by car comparison site driveninja.com has exposed how severely the UAE auto industry has been impacted by the ongoing global microchip shortage.

A study of 35 different UAE car brands has revealed that just 36% of the 308 new car models normally available can be purchased right now. The remaining models are either completely unavailable or require buyers to join lengthy waiting lists – sometimes over 12 months long.

Unsurprisingly, value brands tend to have the most plentiful stock availability with premium brands suffering due to their heightened reliance on microchips to control increasingly complex car systems and features.

Adam Whitnall, CEO of Drive Ninja said: “Everyone who has walked into a showroom in the past 12 months will be aware of just how bad the situation is right now.

“We wanted to put some numbers behind the frustration buyers are feeling while we work with our dealership partners to find suitable replacements for those who simply can't wait."

Collaboration and Competition Can Create Sustainable Supply Chains

While there is no immediate end in sight to the current shortage there are signs that car manufacturers are starting to adapt.

Some dealerships are starting to offer cars without features that have a heavy reliance on chips, while others have started offering models with a more basic design normally sold in developing markets.

Despite this, Mr. Whitnall is hesitant to say when, if ever, things will return to normal.

“We might never see a return to the days where you could walk into a dealership and choose any number of colour combinations for dozens of different models,” Whitnall said.

“The perfect storm created by the Covid pandemic and the subsequent global microchip shortage may have changed the way cars are sold forever. One thing is for certain – if you want a new car right now be prepared to either wait or be flexible with what you’re willing to accept.”

Study Methodology

Drive Ninja surveyed 35 car brands in the UAE over June and July through a combination of personal interviews, shopping tools, and its existing integrations. The study looked at 308 different car models that are currently available to purchase, place an order for, or that are being marketed by the various brands and dealerships.

Read More: Lack of Supply Chain Resilience Causing Inflation Crisis, Says OCI CEO

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