Supply chain roars are projected to cost automakers $ 210 billion this year

Detroit-Supply chain turmoil could cause global automakers to lose $ 210 billion this year, nearly double the forecast earlier this year, consulting firm AlixPartners said Thursday.

Shortage of semiconductors AlixPartners said in a new forecast that it was only part of the problem. The high prices and tight supply of commodities such as steel and plastic resins are pushing costs up and forcing automakers to cut production.

According to new forecasts, automakers are expected to lose 7.7 million units in 2021. Alixpartners advises automakers on supply chain and other issues.

In May, the company predicted that automakers would lose $ 110 billion in revenue, 3.9 million units below their annual production plan.

A disastrous new prediction came in a warning from the automaker, Commercial truck Manufacturers say that the shortage of semiconductors and soaring commodity prices have not been mitigated as industry executives have hoped, as 2021 is heading towards its final month.

Last week, IHS Markit significantly lowered its production outlook for the global automotive industry in 2021 and 2022.

In the US market, car sales are starting to slow as inventories are declining. dealer Dan Hearsch, Managing Director of Alixpartners AutoPractices, said the lot was in supply for about 20 days, less than half the normal amount.

“Initially, we expected to return to normal volume and regain volume,” Hirsch told Reuters. “It won’t happen.”

Instead, automakers could be tight inventories until late 2022 or early 2023, he said.

Semiconductor supplies have been hit in recent months by the surge in COVID in Malaysia, hampering production at key suppliers.

Backlogs at major US ports have hampered automakers’ efforts to import more plastic resin and steel, he said.

Correspondingly, automakers have promised longer contracts to secure supplies and will buy 40 to 50 weeks in advance, Hirsch said.

“They are signing up for something they would never have done a year ago,” he said.

Supply chain roars are projected to cost automakers $ 210 billion this year

Source link Supply chain roars are projected to cost automakers $ 210 billion this year

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