DETROIT – Global automakers could lose US$210 billion (RM879 billion) in revenue this year because of supply-chain disruptions, nearly double a forecast earlier this year, said consulting firm Alixpartners today.
A shortage of semiconductors is just part of the problem, said Alixpartners in its new forecast.
High prices and tight supplies of commodities, such as steel and plastic resin, are driving up costs and forcing automakers to curtail production.
Vehicle producers are on track to lose the production of 7.7 million units this year, according to the new forecast.
Alixpartners advises automakers on supply-chain and other issues.
In May, the firm predicted that carmakers would lose US$110 billion in revenue and fall 3.9 million vehicles short of production plans for the year.
The dour new forecast comes amid warnings from automakers and commercial truck manufacturers that semiconductor shortages and commodity price spikes are not easing as 2021 heads into its final months, as industry executives had hoped they would.
Last week, IHS Markit slashed its global auto industry production outlook for 2021 and 2022.
In the United States market, vehicle sales have begun to slow because inventories on dealer lots are around 20 days’ supply, less than half the normal levels, said Dan Hearsch, a managing director in Alixpartners’ auto practice.
“We had originally assumed we would get back to normal and claw back volume” in the fourth quarter, he told Reuters.
“That is not going to happen.”
Instead, automakers could have tight inventories until late 2022 or early 2023, he said.
Supplies of semiconductors have been hit in the past few months by a Covid-19 surge in Malaysia, which has hobbled production at important suppliers.
Backlogs at major US ports are hampering efforts by auto manufacturers to import more plastic resin and steel, said Hearsch.
In response, he said, automakers are committing to longer contracts to lock in supplies, buying as much as 40 to 50 weeks in advance.
“They are signing up for things they would never have done a year ago.” – Reuters, September 23, 2021
