The global semiconductor shortage will lead to 7.7 million fewer vehicles produced in 2021, costing automakers billions in lost sales, according to consulting firm AlixPartners.
“Everyone had hoped that the chip crisis would have abated more by now, but unfortunate events such as the COVID-19 lockdowns in Malaysia and continued problems elsewhere have exacerbated things,” Mark Wakefield, global co-leader of the automotive and industrial practice at AlixPartners, said in a statement.
Wakefield added that the semiconductor crunch is just one of the supply-side dislocations impacting automakers, with shortages extending to materials such as resin, steel, and labor.
“There really are no ‘shock absorbers’ left in the industry right now when it comes to production or obtaining material,“ Dan Hearsch, a managing director in AlixPartners’ automotive and industrial practice, said in a statement. ”Virtually any shortage or production interruption in any part of the world affects companies around the globe, and the impacts are now amplified due to all the other shortages.”
The updated forecast comes as Secretary of Commerce Gina Raimondo and White House economic adviser Brian Deese were hosting a semiconductor supply chain meeting in Washington on Sept. 23. Participants at the meeting—including producers, consumers, and industry groups—were to discuss the global chip shortage and the impact of the pandemic on semiconductor supply chains.
Automobiles have become increasingly dependent on semiconductors for everything from safety features such as airbag deployment and emergency braking assistance to computer management of engines for better fuel economy and performance.
The parts shortage forced Toyota to cut production by 40 percent in assembly plants in Japan and by as much as 60 percent in North America, while German car manufacturer Volkswagen said in late August that it may be forced to slow production in the fall.
GM President Mark Reuss said on Sept. 21 that he expects the global supply of semiconductors to stabilize but at lower levels than automakers need to rebuild their inventories.
“We’ve got an inventory hole that then got exacerbated by the chip shortage,” Reuss said, remarking on the pandemic impact on the auto industry.
Washington has recognized the vulnerability of foreign semiconductor supply chain reliance, with Raimondo calling the lack of chip production in the United States a “national security risk.”