2021 Q3. Sales Interrupted

Whether you sell New Cars, UHD-TV, Play Stations or White Goods, by now you’ll be aware of the ‘Worldwide Semi-Conductor Shortage’. This is having profound influence on sales, profit and achievement of manufacturer bonus related targets that prevail in many industries. Not least because these companies appear led by people stuck with a process, Sell x product in 3 months = bonus £$ and unable to be creative around incentivising dealers to market and sell what is actually available, not simply adding to an order bank already stretching five months. That’s five months to receive the cash and profit from a sale and as far as the automotive sector is concerned, a used model part-exchanged which adds to used car inventory = another sale and profit delayed. The obvious effect of the present rarity situation is the increase in asset value of used cars.

The three primary causes of the shortages are; Taiwanese Drought, yes really. In a perfect example of the Law Of Unintended Consequences, your new car has been delayed by the lack of rainwater in Taiwan where ultra pure water in large amounts is required to produce these electronic components. The global Covid 19 pandemic, obvious one this, more people were at home in 2020 and the last quarter of the year saw a 25% plus increase in electronic goods (boredom) and car sales (avoiding public transport) globally, pulling forward components impossible to manufacture quickly. Finally, the China – USA Trade War, yep, pesky Chy-Nah is preventing your new microwave pinging in the kitchen. Last year the United States Government / Trump Administration placed trade restrictions on China’s biggest silicon chip manufacturer, which made it harder for them to sell to companies with American ties. These restrictions forced companies to use other manufacturing plants like Samsung and the aforementioned Taiwanese companies. However, these companies were already producing at maximum output.

My point of describing this current handicap is to ask the question, ‘What is your business or industry doing to be CREATIVE about selling what is PHYSICALLY available to sell and not just taking orders to deliver months into the future. Reverse engineering a result? Let me know in your comments.

Thanks for reading.

Find me on Clubhouse @ thestevecee