crisis

Rental Companies Buy Up Used Cars as Chip Crisis Get Worse

The semiconductor shortage has slashed vehicle production so much that rental-car companies can’t get the new cars they need, so they have resorted to buying used vehicles at auction.

This is uncharted territory for the likes of Hertz Global Holdings Inc. and Enterprise Holdings Inc., which have made their profits by purchasing new vehicles cheaply in bulk, renting them out for as much as a year and selling them at auction. In the past, they have bought some used cars to shore up an occasional unforeseen burst in demand, but rarely for the mainstays of their fleets.

“You would never go into auction to buy routine sedans and SUVs,” said Maryann Keller, an independent consultant who used to be on the board of Dollar Thrifty Automotive Group, which is now part of Hertz. “These are special circumstances. There is a shortage of cars.”

The demand is sending used-car costs

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How the pandemic led to a rental car crisis just as Americans are ready to bust loose

“Usually car rental is an afterthought,” said Benjamin Tuttle, a computer-assisted design programmer from Minnesota, who was taken aback when Hertz quoted him a price of $240 per day to rent a sedan to tour Colorado’s Rocky Mountain National Park.

The industry backfire illustrates that the post-pandemic recovery, while strong, may not be entirely smooth. As more retail businesses reopen, many report trouble hiring enough workers to cope with surging demand. Manufacturers complain that raw materials are scarce – a semiconductor shortage that hobbled auto production is making it hard for companies like Avis to restock.

“The covid shock was unlike anything we have experienced before. As we go into the recovery phase, we’re going to see friction and disruption in the normal flow of economic activity,” said Kathy Bostjancic, chief U.S. financial economist for Oxford Economics. “It’s going to be a bit erratic and disrupted, but the pace of

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Factory blaze adds to computer chip supply crisis

One of the car industry’s biggest computer chip suppliers has warned that a major fire at one of its factories in Japan could have a “massive impact” on its ability to fulfil orders.

The incident comes at a time when supplies of chips to the auto industry were already running short.

Shares in the semiconductors firm Renesas fell, along with its clients including Toyota, Nissan and Honda.

Elsewhere, Volkswagen has said chip scarcity might last until the autumn.

“I think things will get stable by the fall but certainly its going to be complicated, and its going to be challenging but I think we’ll navigate it,” Scott Keogh, VW’s North America chief executive told the BBC.

He added that some of the company’s plants were likely to run less shifts a day, but added that he hoped factory shutdowns could be averted.

Clean rooms

Renesas has said the blaze occurred

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UK car industry warns one in six jobs could be lost after COVID-19 crisis

Thousands of unwanted new and used cars at Thurleigh Airfield in Bedfordshire, England. Photo: Chris Gorman/Getty Images
Thousands of unwanted new and used cars at Thurleigh Airfield in Bedfordshire, England. Photo: Chris Gorman/Getty Images

 A third of the automotive industry workforce in the UK is still on furlough after coronavirus lockdowns and a collapse in demand brought the sector to a near-total halt in the past couple of months.

According to a new survey by the Society of Motor Manufacturers and Traders (SMMT), there were more than 6,000 redundancies in the car industry in the month of June — and one in six jobs will remain at risk when the government’s furlough scheme ends in November.

SMMT chief executive Mike Hawes today called on the government for a specific ‘restart package” to safeguard against jobs losses, and help boost recovery for the important industry.

“The prolonged shutdown has squeezed liquidity and the pressures are becoming more acute as expenditure resumes before invoices are paid,” said Hawes in

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