2022 Kia Forte GT First Test: Extroverted, Eager, and Well Equipped

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Grab a soda and your new car wish list and start shopping: More semiconductor chips are coming in 2022 and slowly but surely the chip-shortage horror movie will fade to black.That does not mean 2022 will necessarily be a blockbuster year for inventory, but the global microchip shortage is expected to continue to improve which should mean less or no downtime for automakers desperate to build more vehicles to fill orders and depressingly empty dealer lots. Bottom lines have also taken a hit with billions in lost revenue, and automakers affected the most have also grappled with lost market share.The industry is holding its collective breath that things won't backslide, and while shortages are projected to last into 2023 or longer—and may prove to be endemic—the hope is they will be more manageable as chipmakers increase capacity and automakers find ways to make cars with fewer chips or use more of the higher-tech wafers that are more plentiful.Consumers also need a break—from high prices, few incentives, empty showrooms, long delivery times, and delayed vehicle launches.Huge Losses and CostsThe industry has also shined a light on what appears to be a systemic flaw in the supply chain. Companies and governments are looking to plug this hole for the future. They can't afford not to. The shortage cost the global auto industry about $210 billion in lost revenue in 2021, according to AlixPartners.The auto industry's rebound during the pandemic had been fairly orderly until the chip crisis prolonged and threatened the expected recovery cycle, says Colin Couchman, executive director of Global Automotive Sales Forecasting at IHS Markit. "The chip crisis was wider and deeper than we thought."The world will have lost 11.3 million units of production in 2021 because of the chip shortage, according to AutoForecast Solutions. Drive by any almost empty dealer lot to see what this looks like on the ground. The impact could be another 7 million units in 2022 and 1.6 million in 2023, IHS forecasts.  Economists at Cox Automotive do not expect the wholesale car market to reach pre-pandemic and pre-chip crisis levels until at least 2025.A car dealership stands empty in Laurel, Maryland on May 27, 2021. (Photo by Jim Watson/AFP via Getty Images)How Did This Happen?The crisis dates to March 2020 when the pandemic forced automakers to shut down plants and temporarily halt orders from suppliers. At the same time, the electronics industry faced increased demand for cell phones, televisions, computers, games, and home appliances from customers abiding by stay-at-home orders. Chipmakers rerouted their supply to the electronics industry, which also showed a willingness to pay more for the silicon wafers.When the auto industry came back online faster than expected in the summer of 2020, it found the chips needed weren't available and suppliers were content to keep their more lucrative contracts with others. Big orders can't be met quickly; it takes about three months to make even the simplest of semiconductors. The auto industry only represents five percent of the chip industry, so it lacked much clout to get what it needs.Cars use a lot of older, lower-tech "legacy" chips that cost only a few dollars each and have lower profit margins so there is less incentive for chipmakers to invest in more capacity. The low cost of legacy chips belies their importance. Vehicles rely on such chips for everything from door locks and infotainment to brakes and advanced driver assist systems. Advanced wafers that incorporate more chips are more plentiful; suppliers would rather make more sophisticated chips, made with newer technology that can put more chips on a single silicon wafer, and yield a better return.More Setbacks From Fire and COVIDThe road to recovery has been bumpy. A fire at the Renesas Electronics chipmaking plant in Japan in March brought production to a halt and it was half a year before it was fully ramped up again. Ford was among the automakers heavily dependent on the Renesas plant for its chip supply. COVID-19 outbreaks and lockdowns in the fall in sparsely vaccinated southeast Asian countries like Malaysia, Indonesia, and Vietnam where the chips are tested and packaged further disrupted production.General Motors chair and CEO Mary Barra said she is cautiously optimistic that the situation will improve in 2022, with the second half of the year better than the first six months in terms of supply. But she expressed concerns that the Omicron variant will cause a repeat of the Delta spread that forced the shutdown of the plants in southeast Asia.Stellantis CEO Carlos Tavares said his order books are through the roof, but he expects the next few years to continue to be distorted by the chip shortage.Automakers Take Emergency MeasuresAutomakers prioritized, putting what precious semiconductors they had in their most profitable vehicles such as full-size trucks and SUVs, as well as luxury vehicles. As the shortage became more acute, idling plants making vehicles with the lowest demand wasn't enough. Every week there were fresh lists from automakers of which plants were being shut down around the world. When the shortage was at its peak, Ford was forced to stop making F-Series trucks and GM idled plants making its large trucks and SUVs.Necessity forced automakers to get creative. They ran vehicles down the line, skipping some components, and parking the almost finished vehicles until the missing part and/or features could be added and the vehicle delivered to the dealer. When factory lots overflowed with partially finished models and dealership lots emptied out with little available inventory, automakers starting sending the unfinished vehicles to dealers to await chips and components.Another tactic: shipping vehicles without specific features such as wireless charging, lumbar support in the passenger seat, automatic start-stop, or extra key fobs to save chips. And going forward, automakers are working to reduce the number of chips needed in each part. "Historically, we've made decisions as if chips were nearly infinite so each and every module required a chip, every window lift, every modulator," Volkswagen of America CEO Scott Keogh said at a recent Reuters Automotive Summit. He said VW is looking at whether cars can be developed with more modules and fewer chips.Impact on ConsumersBuying a vehicle, new or used, became more difficult. Pre-crisis, automakers carried 70 to 80 days' supply of many models so buyers could make a deal and drive away in their new car. U.S. inventories fell to as low as 10 days' worth, hitting levels not seen since the global financial crisis.New car buyers, or those turning in a lease, found few vehicles to choose from. Consumers found themselves ordering their new car and in some cases waiting months for delivery. They also experienced sticker shock. The average transaction price for a vehicle now exceeds $45,000, according to J.D. Power, and the average incentive is down to about $1,600.Fewer trade-ins meant fewer used cars, which saw even larger increases in prices. New-vehicle prices rose about 12 percent over the year while used-car prices jumped more than 42 percent, according to a white paper released by KPMG just before Christmas. This suggests used car prices could correct and experience a big drop in 2022.Some anticipated new vehicle launches were delayed, including the Nissan Ariya, Rivian R1T and R1S, and the Tesla Cybertruck. Many, including GM, prioritized their electric vehicles, with that automaker making sure its new family of EVs using the Ultium platform remained on schedule, starting with the recent timely launch of the 2022 GMC Hummer EV pickup.The good news: stockpiles of new vehicles continue to improve. In December the U.S. had a monthly supply of more than 1 million vehicles for sale for the first time since July, according to J.D. Power. But December sales were still tracking about 3.5 million lower than in 2020, a year ravaged by the pandemic.Evaluating the Supply ChainThe crisis has the industry rethinking the just-in-time delivery of parts approach for key components such as chips, which might warrant stockpiling. Toyota was not hit as hard as other automakers initially because it had stockpiled chips to avert exactly this kind of crisis, having learned hard lessons from supply issues following past earthquakes and tsunamis."For 2022, the battleground will be chip allocation," Couchman of IHS says. "Demand is not driving the industry. It is the supply shortage that is driving it."Global auto sales are expected to be just shy of 80 million in 2021 and forecast to reach 82.4 million in 2022, growing to 90.1 million in 2023 and 96.4 million in 2024. The U.S. was expected to end the year about 15 million, up from 14.6 million in 2020. IHS expects 2022 to grow slightly to 15.5  million and reach 16.8 million in 2023.Being in the Chip BusinessSemiconductors are a $450 billion global industry. U.S. capacity accounted for only 12 percent of the world's semiconductor chip production in 2020, down from 37 percent capacity in 1990, according to the Semiconductor Industry Association. China, Taiwan, and South Korea are bigger players when it comes to these tiny silicon transistors.The crisis has focused national attention on the need to remedy this and spur domestic production. A bill was introduced to increase R&D and chip production in the U.S. In June, the Senate approved $52 billion in funding to boost the semiconductor industry. It has not yet passed in the House. And only $2 billion is earmarked for supporting the production of legacy chips.Solutions will take time; plants can cost up to $20 billion and take years to reach full production.More Capacity On the WayThe world has realized the need to expand global production. In 2021 global chip suppliers committed to spending about $146 billion, up about a third from 2020, according to research firm Gartner. Unfortunately, less than one-sixth will be used to manufacture the older legacy chips most in demand. In addition to being less lucrative, investing to make low-tech chips is riskier because they are in danger of being phased out which would mean less return on the investment.Taiwan Semiconductor Manufacturing Co. plans to spend $100 billion to build new chip plants over the next three years. TSMC and Sony are partnering to build a new plant in Japan to make the older legacy chips most in demand. But it won't be ready for mass production until 2024. Taiwan Semiconductor is also adding a new plant in the U.S. and expanding production in China and at its $12 billion factory in Arizona.Samsung Electronics announced it will build a $17 billion chip-making plant in Taylor, Texas, but production is not expected to start until later in 2024. Samsung has one U.S plant now, in Austin, Texas. Taylor is about 30 miles from Austin. The new plant will make advanced chips.Intel Corporation has plans to complete factories in the U.S. and Europe over the next decade.Will Take TimeEarly in 2021 automakers hoped the crisis would be short-lived and they would make up for lost production later in the year. Those hopes were dashed. KPMG says it could take until October 2023 for vehicle supply to meet projected demand. Some researchers project the global supply of legacy chips won't catch up with projected demand until 2025.Volkswagen executives have said that after the initial crisis dies down, they still expect a 10 percent shortage over the long term because adding production capacity takes up to two years. VW was among the automakers harder hit by the shortage.Companies are making deals to ensure continuous supply in the future. In December, BMW said it had secured direct supply contracts with chip maker INOVA Semiconductors and GlobalFoundries, ensuring long-term supply of chips. Ford and GM also have worked to secure direct contracts with semiconductor suppliers.Stellantis has a deal with Foxconn owner Hon Hai Technology Group to design four new families of chips that will meet 80 percent of the automaker's chip needs, starting in 2024. CEO Tavares says the crisis has damaged the relationship between automakers and top tier suppliers who have failed to fix the situation. Automakers "are supposed to be protected by our Tier 1s from this kind of situation," Tavares said during a recent trip to Detroit.In the end, all the finger pointing does little to fix a problem that has hurt suppliers, automakers, and consumers alike. All parties have a vested interest in filling car lots again. The good news is the situation continues to improve. It is not happening as quickly as people would like, and there could be more setbacks, but steps are being taken to avert a similar crisis in the future involving not only semiconductors but also other key components needed for the electric and advanced vehicles on the way.Lead photo: Narumon Bowonkitwanchai/Getty Images

kia sorento Full OverviewConsider this the torture test for our long-term Kia Sorento. Over the course of 17 days and 4,059 miles across seven states and seven national parks, I nearly doubled the miles of our golden go-getter, all while facing the elements nightly in a rooftop tent. Even though it wasn't as extreme as our 7,000-mile off-road trip with Rivian across the Trans-America Trail, you get to know a car pretty well when averaging nearly 240 miles a day.1. I'd Rather Sleep on the GroundI'll admit, a rooftop tent has its advantages. The built-in mattress is larger and more comfortable than any traditional sleeping pad, there's little chance of waking up to a bear outside your door, and it looks ultra rad. It kept me safe and dry in a heavy storm, too. I still wouldn't buy one.They're tricky to install in the first place (ours weighs about 100 pounds), and even once it's up there and I had erected the thing 10 times, it still took at least 20 minutes of climbing around on the roof to set up. The added wind noise is a drag (get it?), especially with long hours on the highway. Not to mention, you have to find a perfectly flat parking spot, and you can't drive anywhere until it's folded up.Our Thule Tepui Explorer Kukenam 3 didn't hold up all that well, either; after a couple weeks of hard use, plastic pieces cracked and fell off, some metal tent supports became permanently bent, and one window fastener fell off altogether. For the near $2,000 asking price, we'd much rather have an easy-setup conventional tent and an air mattress, plus probably a wad of cash left over.2.  The Infotainment's Hidden GemOur long-term Sorento SX rocks a 10.3-inch touchscreen in place of the base model's 8.0-inch system. The display is large, bright, and positioned high on the dash, but my favorite feature is easy to miss.Throughout the majority of my trip, the screen was displaying Apple CarPlay. Thing is, CarPlay doesn't occupy the entire screen—there's a 2-inch-wide strip of real estate on the far right of the screen. It displays the outside temperature by default, but swipe up or down, and it has other functions, including a compass and altimeter.An altimeter would not have excited me a few years back. I lived in Rhode Island, a state entirely devoid of mountains where the highest elevation is a paltry 812 feet at Jerimoth Hill. Yes, hill. But watching the altitude reading climb higher as I ascended to the 12,183-foot tundra along the historic Trail Ridge Road running through Rocky Mountain National Park was a novelty I won't soon forget.3. Off-Road SurpriseFor a mainstream three-row crossover, I was pleasantly surprised with the Sorento's performance away from pavement. Our long-termer is fitted with AWD and a factory lift that affords 8.2 inches of ground clearance; we put them to work.Nightly trips to national forests for free camping meant driving down rutted, occasionally muddy dirt roads for at least a few miles, and the Sorento handled them like a champ. One slick trail up the side of a dam in southern Idaho required selecting AWD lock and Snow mode, but with a bit of wheelspin, the 'Toe and I were rewarded with a tranquil sunset over the lake.The family hauler proved fun, too. Kia allows the driver to disable both traction and stability control. The nannies still limit power with the tiller angled more than a few degrees off-center, but they'll allow for little four-wheel drifts on the slippery stuff if you want to play rally driver. Another impressive note: After hours driving lumpy washboard trials, the Sorento didn't develop a single squeak or rattle.4. Driver Assist Features Aren't PerfectWe've already spilled digital ink on how useful the Sorento's Highway Drive Assist active safety features can be. I'd estimate I had the lane centering and adaptive cruise system active for at least 75 percent of my miles, and the trip was better for it. The HDA suite even managed to keep itself centered on a road without any lane lines. Until it didn't.One major flaw in the system is that it doesn't issue any audio or sensory alert when it can no longer read the road—only a tiny green light turning off in the dash. Had I not been actively watching the road, hands and feet at the ready to take control, I might have found myself upside down in a ditch in central Wyoming.No matter how much you trust these systems, they do not assume your responsibility as a driver. Rather, your responsibility shifts from controlling your inputs to monitoring the road and the system.Looks good! More details?