3 minute read
PRESIDENT-ELECT’S MESSAGE: WHAT IS GOING ON?
from the Front Row - March 2022
by WSIADA
What is going on?
BY WASIM AZZAM, WSIADA BOARD PRESIDENT-ELECT
Many people are wondering what is going on with the economy, especially used car prices.
Without a doubt, economics affects our daily lives in many ways because it outlines the choices we must make every day about work, leisure, consumption, and savings. Our lives are also influenced by macro-economic trends, such as inflation, interest rates, and economic growth
Some of the famous words in economics are inflation, supply and demand. While inflation occurs when prices of goods go up, decreasing the purchasing power of your dollar, supply and demand is the amount of a commodity, product, or service available and the desire of buyers for it.
The year 2021 was not just a bad year for finding a new car at an affordable price. It was also a bad year for finding an affordable used car for both consumers and used car dealers.
The reason for the high prices is the shortage in supplies of new cars that was caused by the shortage of computer chips, which are defined as tiny transistors made from silicon. These chips allow computers, smart phones, appliances, and many other electrical devices to function. The global chip shortage, however, was prompted by the COVID-19 pandemic and the surge in demand for electronics. Consumers and businesses started buying new laptops and servers to cater to staff working remotely and children being home-schooled.
Of course, shortage means fewer items and when fewer items are available, consumers are willing to pay more to obtain them, so that is why everyone is paying high prices for used cars.
According to a recent report from the Labor Department, consumer inflation soared 7% in 2021, the biggest increase in nearly 40 years. According to the Bureau of Labor Statistics’ Consumer Price Index, since March of 2020, used car prices are up a staggering 39.8%.
Economist Guillaume Assogba from Yole Development shared his predictions on what consumers can expect soon. He said the shortage of chips that started in cars has spread to all industries using these components, which has led companies to reduce production. He said the shortage’s impact extends far past what many are paying attention to.
As an example, Assogba pointed to the steel industry, which has seen reductions in sales as fewer cars are produced. This means that even when chips stabilize, the scaled-down steel industry may cause further delays as it takes time to get back in the swing of pre-shortage production volumes. Assogba predicts that consumer tech industry will recover first, by the end of 2022, thanks to tech manufacturers having kept up relations with chipmakers throughout the pandemic. The auto sector, meanwhile, will likely have to hope for 2023, as it did not sufficiently maintain relations. n
EVENTS CALENDAR
TITLE WORKSHOP
(Virtual Meetings) March 16 – 9:00am-12:00pm wsiada.com/title/March2022
April 20 – 9:00am-12:00pm wsiada.com/title/April2022
CHAPTER MEETINGS:
March 22 – Vancouver 6:00pm – 9:00pm Hilton Vancouver 301 W 6th St., Vancouver 98660
March 29 – Tri-Cities 7:00pm-10:00pm Clover Island Inn 435 N Clover Island Dr., Kennewick 99336
March 30 – Yakima 7:30am – 10:00am Hilton Garden Inn 401 E Yakima Ave., Yakima 98901
April 5 – South Sound 7:30am – 10:00am Griot’s Garage 3333 S 38th St., Tacoma 98409
April 12 – North Sound 7:00pm – 10:00pm Courtyard Seattle-Kirkland 11215 NE 124th St., Kirkland 98034
April 13 – North Cascade 7:30am – 10:00am Drager’s International 1645 Walton Dr., Burlington 98223
April 19 – Spokane 6:00pm – 9:00pm Hilton Garden Inn 9015 W Highway 2, Spokane 99224
ANNUAL CONVENTION
June 13 – 15th
Campbell’s Resort at Lake Chelan 104 W Woodin Avenue Chelan 98816
Monitor Inventory & Sales Process Instant Approvals 24/7
Prompt ACH Funding Full Spectrum Financing Competitive Rates Aggressive Advances Flexible Terms
Local Branch Offices Training & Support
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SAVE the DATE
CHELAN, WA June 13-16, 2022
CAMPBELL’S RESORT AT LAKE CHELAN 104 W Woodin Avenue, 98816
WSIADA
2022 Convention
Breakfast, lunch and dinner are included each day with registration. The last full day features events at local businesses for entertainment, which may include golf tournaments, horse riding, and more! Families will be welcome to join. Save the date and look for more details soon!
