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The car industry got their demand planning wrong, so they lied to their vendors that they wouldn't need that inventory. They then turned around and went "hey ac

The car industry got their demand planning wrong, so they lied to their vendors that they wouldn't need that inventory. They then turned around and went "hey actually screw that we want the inventory after all", making their previous promise that they wouldn't buy it a lie.

lotsofpulp 6y ago
I would not characterize that as a lie, which typically involves an intent to deceive. Rather, the only people with intent to deceive might be the chip vendors. They either sold chip capacity that the automakers still had the legal rights to, or they reneged on sales to non automakers to resume supplying to automakers.
- genmud 6y ago
  No, the chip vendors had their orders cancelled by ford/gm/etc., so they cancelled their orders with the fabs, who then sold the fab time to other chip vendors for different products. Why would you build chips you know you can't sell? Also, people talk about how big of an impact car manufacturing is to the economy and while that is true, they aren't chip manufacturers biggest customers. Apple spends more per year on semiconductors than the ENTIRE auto industry. To top that off the automotive ICs aren't high margin stuff, so if I was a fab or chip vendor, I would be focused on higher margin stuff. The blame for this is SOLELY on the auto manufacturers.
shock-value 6y ago
That's not what "lie" means.
thu2111 6y ago
The most surprising thing about this story is the apparently massive number of people who didn't have cars, relied entirely on public transport and then decided to buy cars? How certain are you of that analysis? Surely that is a rather rare case, as the typical public-transit-only person tends to live in a city where parking space is at a premium. Whole tower blocks cannot easily switch from transit to cars overnight just because they prefer it. Or is this the mass exodus from American cities I keep reading about? They're buying cars because they're moving from NY to Florida, that sort of thing?
- antiterra 6y ago
  It could be both. I imagine public transit is something people would try to avoid in a pandemic. When I lived in NYC I always thought about getting a car but it never made sense to spend that money. Bring in COVID and that might have done it. My running theory is that manufacturers and retailers continue to underprice their goods,likely because they expect to eventually return to normal. This ends up effectively hiding inflation. Many buyers have more discretionary cash than usual due to reduced spending from lockdowns. Demand is therefore increased on the things people can and want to buy. Then resellers/scalpers see the margin and buy up inventory to arbitrage. The scarcity compounds.

lotsofpulp 6y ago

I would not characterize that as a lie, which typically involves an intent to deceive. Rather, the only people with intent to deceive might be the chip vendors. They either sold chip capacity that the automakers still had the legal rights to, or they reneged on sales to non automakers to resume supplying to automakers.

genmud 6y ago
No, the chip vendors had their orders cancelled by ford/gm/etc., so they cancelled their orders with the fabs, who then sold the fab time to other chip vendors for different products. Why would you build chips you know you can't sell? Also, people talk about how big of an impact car manufacturing is to the economy and while that is true, they aren't chip manufacturers biggest customers. Apple spends more per year on semiconductors than the ENTIRE auto industry. To top that off the automotive ICs aren't high margin stuff, so if I was a fab or chip vendor, I would be focused on higher margin stuff. The blame for this is SOLELY on the auto manufacturers.

shock-value 6y ago

That's not what "lie" means.

thu2111 6y ago

The most surprising thing about this story is the apparently massive number of people who didn't have cars, relied entirely on public transport and then decided to buy cars? How certain are you of that analysis? Surely that is a rather rare case, as the typical public-transit-only person tends to live in a city where parking space is at a premium. Whole tower blocks cannot easily switch from transit to cars overnight just because they prefer it. Or is this the mass exodus from American cities I keep reading about? They're buying cars because they're moving from NY to Florida, that sort of thing?

antiterra 6y ago
It could be both. I imagine public transit is something people would try to avoid in a pandemic. When I lived in NYC I always thought about getting a car but it never made sense to spend that money. Bring in COVID and that might have done it. My running theory is that manufacturers and retailers continue to underprice their goods,likely because they expect to eventually return to normal. This ends up effectively hiding inflation. Many buyers have more discretionary cash than usual due to reduced spending from lockdowns. Demand is therefore increased on the things people can and want to buy. Then resellers/scalpers see the margin and buy up inventory to arbitrage. The scarcity compounds.