While every industry has been impacted by the COVID-19 pandemic, the automotive industry has globally experienced setbacks that have rippled down into other industries. With ongoing production delays, shortages of raw materials, and high customer demand, the automotive industry has been attempting to regain footing after a challenging year. As a result, the prices for both new and used cars have increased substantially. Since not everyone can afford these higher prices, we are observing higher demand for refurbished cylinder heads. The economics makes it cheaper to buy a refurbished cylinder head rather than to buy a new or used car. (or rent a car as vehicle rental prices have skyrocketed as well in the U.S.)
Increase in New Car Prices
Despite it being a good season for car sellers, it is the opposite for car buyers. Due to the worldwide shortage of semiconductors, new car production has been greatly slowed and even halted in some cases. These semiconductors are essential for producing microchip processors in new cars.
Automakers are forced to compete against other industries for a microchip which plays a major component in new car designs. Automotive microchips are used to control throttle body, cylinder deactivation, navigation, Wifi, backup cameras, emergency braking, smartphone connectivity, and cruise control. All of the technological and safety improvements made in new cars are put on production hold since they require this microchip.
As a result of the high demand for new cars, auto dealers have had to increase their new car prices. According to Cox Automotive, the North American new-car market production is down 3.4 million vehicles within the first three months of 2021. While production is not permanently down, this shortage drives the prices up in the new-car market-leading people to the used-car market.
Microchip Shortage could last into 2022 Video
CNBC Television interview with Ganesh Moorthy, CEO at Microchip Technology, addressing the global microchip shortage and his predictions for how long it will take until vehicle production catches up.
Increase in Used Car Prices
Traditionally, used cars are a more reasonably priced option to replacing an old vehicle. Unfortunately, with the state of the current automotive industry, that is not the case. As new-car prices increase, used-car prices follow the same pattern. With the sudden switchover of people looking in the used-car market, car dealerships are struggling to keep their lots stocked.
More people are buying used cars than new cars. As of April 2021, used car sales went 58 percent from the previous year (Slate.com). These high prices are well over what the vehicle is actually worth, but the demand is high enough for some people to match it. The U.S. Bureau of Labor Statistics stated that these used-car prices jumped nearly 30 percent between May 2020 and May 2021 (U.S. Bureau of Labor Statistics).
This 30 percent increase has caused many people to reconsider selling their vehicle and instead repair it. Eventually, the microchip shortage will be resolved, but until then, people are holding off buying new and used cars to fix their own.
High Demand for Refurbished Cylinder Heads
As the automotive industry experiences production delays and growing prices, drivers are delaying new and used car purchases to focus on repairing their current vehicles. In this economy, it is more reasonable to refurbish a cylinder head rather than replace the entire vehicle.
Cylinder heads are essential to the performance of the engine. It is crucial to have an experienced mechanic refurbish your cylinder head to verify there are no cracks or leaks. Clearwater Cylinder Head offers custom rebuilt cylinder heads that undergo multiple inspections to ensure you have a top-quality product. Since we understand the frustration with the delays in the automotive industry, our cylinder head production is dedicated to the fastest turn-around time while maintaining the highest degree of quality.
With the rise in demand for refurbished cylinder heads, Clearwater Cylinder Head offers *free* nationwide shipping for your vehicle’s newly rebuilt cylinder head.
Buy Replacement Heads at Clearwater Cylinder Head
With thousands of customers and over 25 years of experience, Clearwater Cylinder Head prioritizes customer satisfaction through our high quality cylinder heads. With the rise in demand for refurbished cylinder heads, our state-of-the-art facility is dedicated to manufacturing the finest quality of cylinder heads nationwide.
Our employees are quality-oriented to ensure the best manufacturing, inspecting, restoring, and replacing of cylinder heads on all vehicles. If your vehicle needs a replacement cylinder head or just an inspection, then Clearwater Cylinder Head is the place to call. Our team is happy to assist you with any questions regarding cylinder head selection and purchase.
Please call us to inquire about new cylinder heads for your vehicle by calling us toll-free at 1-800-572-1963. We look forward to serving you!