Car buyers all over the world have been waiting longer and longer for their new rides to arrive.

Many automotive manufacturers point to long-running supply issues with semiconductors, which are used in various car components like engine computers, infotainment systems and even vehicle safety systems.

The Chamber of Automotive Manufacturers of the Philippines Inc. (CAMPI), the country's largest group of automakers, told AutoFun Philippines that it would consider tying up with the domestic semiconductor industry to address the shortage.

"It is possible, depending on the demand, as local production can only be competitive with enough volume," said CAMPI President Rommel Gutierrez, who is also the first vice president of corporate affairs of the country's largest car brand, Toyota Motor Philippines.

Gutierrez's statement comes after Honda Cars Philippines Inc., which is also a member of CAMPI, announced on Sept. 24, 2022 that deliveries of its all-new HR-V crossover were indefinitely delayed because of the global semiconductor shortage.

The HR-V is assembled at the Japanese carmaker's plant in Thailand. It was launched in the Philippines on Apr. 19, 2022.

Gutierrez said local carmakers are finding ways to meet customer demand.

"Local distributors understand the sentiments of the customers," he said. "In the meantime, distributors try their best to provide estimated delivery times or offer models that could be made available at a relatively shorter period of time."

Impact of shortage immeasurable

Gutierrez admitted that semiconductor supply woes are one of the major factors in the production and delivery of new cars locally.

"It's difficult to quantify the impact in terms of lost potential sales for both complete knockdown (CKD) and completely built-up (CBU) brought about by the chip shortage as many factors also contribute to the unfavorable supply situation, such as COVID-19 lockdowns in countries that supply specific parts," he said.

Issues with automotive semiconductors began in early 2020 at the onset of the COVID-19 pandemic when global car production was forced to wind down because of economic and health restrictions.

As car production started to rebound in the following years, carmakers were faced with insufficient supply, competing with other major semiconductor-dependent industries like PC and smartphone manufacturers.

Gutierrez said he is not sure when the supply issues would go back to pre-pandemic levels, but noted the rise in local auto sales during the second half of 2022.

Largest contributor to Philippine economy

The semiconductor and electronics industry is the largest contributor to the local manufacturing sector and the Philippine economy, according to the Department of Trade and Industry.

From January to May 2022, it produced 59.6 percent of Philippine exports, amounting to $19 billion (around Php 1.12 trillion, as of press time). This is according to data from the Semiconductor and Electronics Industries in the Philippines Foundation, Inc. (SEIPI), the country's largest organization of foreign and domestic electronics companies.

SEIPI said 73 percent of the local industry produces semiconductors, while the rest manufactures electronics like office equipment, radar devices, medical instruments, and automotive electronics.

It primarily exports products to Hong Kong, the United States, China, Singapore, and Japan.