The Brazilian And Other Countries’ Armored Vehicle Market Faces Semiconductor Chip Shortage, Automotive Sector And Dealerships Struggle With Supply Issues

From Electronics to Armored Vehicles: Understand Why Various Industrial Sectors, Dealerships, and the Automotive Sector Have Suffered from the Impact of the Global Chip Shortage.

The global production crisis of microchips, known as semiconductors, has affected various industrial sectors, which are facing difficulties in acquiring the product. The automotive sector for armored vehicles and dealerships were among those affected, along with electronics companies, particularly those that manufacture tablets, computers, and cell phones. 

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In Brazil, the impact on the production of armored vehicles has been significant. Despite the growing demand for armored vehicles, the scarcity of inputs for producing this type of automobile has negatively affected the sector.

Discover the 10 Most Surprising Armored Vehicles in the World

Autobunkers Defense is a business group with 20 years of market experience that has become a reference in the country for automotive armoring in the automotive sector. The group has already sold over 15,000 armored vehicles and executed 7,000 armoring projects. Autobunkers Defense possesses all the certifications required by the Brazilian Army, which is responsible for controlling vehicle armoring and handling other controlled products, such as explosives, weapons, ammunition, and ballistic materials.

According to Olavo Ehmke, managing partner of the Autobunkers Defense group, the lack of semiconductor microchips used in the manufacturing of armored vehicles is affecting production. “It has harmed the entire chain. From the budget vehicle lacking accessories to the more complex ones. The shortage of these products is due to the use of semiconductors for the production of televisions, cell phones, computers, and all the items that people were eager to buy during the pandemic,” he reveals.

The Role of Semiconductors in the Automotive Industry and Their Importance for Producing Armored Vehicles

The automotive industry has definitively entered the digitalization era. Along with this, there has been a need to reduce pollution, generate more comfort and autonomy, leading to “more monitored” and protected vehicles. In this case, semiconductor microchips are key components for this digitalization process.

The director of Autobunkers Defense, points out that sophisticated armored vehicles are those that most suffer from the lack of inputs. He notes that “The more sophisticated the car, the more semiconductor microchips it requires. There are various equipment and accessories, making it harder to complete the production line. And it is exactly these cars that are in short supply in the market, sophisticated vehicles costing between five hundred thousand and one million reais. They are hard to find and there’s no delivery schedule for these cars,” he reports.

He also emphasizes that these problems have generated setbacks not only for consumers but also for the dealerships themselves that sell brand new vehicles. “This poses a direct threat to the survival of this type of dealership network, which has even faced judicial issues for reimbursement of losses due to the inability to offer the new vehicles they require. It is impossible to remain in the market selling less than 10% of what the company committed to in its business model,” he states.

Furthermore, Ehmke mentions that Autobunkers has several clients waiting for armored vehicles. “There are numerous orders, and as these cars arrive, we will be producing the armoring and making it available to the market,” the executive concludes.

The National Association of Automotive Vehicle Manufacturers (Anfavea) projected earlier this month about the production of automakers based in the country. According to them, automakers are expected to produce fewer vehicles in December than in November. Dealerships experienced their worst November in sales since 2005.