Jaguar Land Rover to suspend output due to chip shortage
> What has made the auto industry particularly vulnerable is its reliance on just-in-time delivery, where parts are brought in when needed, rather than being stockpiled.It's fascinating that the response is to close production rather than increase prices.Those warning of inflation point to events like this as support. But inflation requires that higher producer costs be accepted by consumers.And for that price transmission mechanism to work, there needs to be supply actually available at the higher price. It appears that just-in-time economics mean that in the event of a shortage your supply just goes offline. You don't get higher prices, just empty shelves.