Chip shortage continues to thwart global vehicle production

September 27, 2021 // By Christoph Hammerschmidt
Chip shortage continues to slow down global car production
The continuing supply shortage of semiconductor components is having a full impact on production in the car industry. The consulting firm Alix Partners estimates that 7.7 million vehicles cannot be built this year because of the supply shortage. SOS calls are also coming from the supply chain.

The chip shortage has become a permanent problem for the car industry. Already in January and May, the consulting firm Alix Partners had made estimates regarding the impact of missing chips on the production and delivery of vehicles, and now the experts have increased their figures once again. According to the now updated projections, the car industry will produce 7.7 million fewer vehicles worldwide than it could under normal delivery conditions. This corresponds to a lost turnover of $210 billion (approx. € 179 billion). This is well above the company's May estimate of $110 billion. It also shows: the situation is not only related to faulty order management in the auto industry, but continues to be related to outages due to the ongoing pandemic.

"Contrary to many earlier expectations, chip production capacity has not yet recovered and pre-crisis levels are far from being reached. Among other things, production cutbacks caused by Covid-19, e.g. currently visible in plants in Malaysia, have not abated. Thus, we assume that more than 7 million fewer vehicles can be produced worldwide this year due to the chip shortage. While the OEMs can compensate for this with partly higher vehicle prices, the suppliers are finding it more difficult and, in our estimation, are even more affected by the chip shortage than the OEMs," says Dr Marcus Kleinfeld, Managing Director at AlixPartners in Germany.

Not only the car manufacturers themselves, but also the suppliers are groaning under the supply shortage. According to media reports, Volkswagen is currently only running the early shift at its main plant in Wolfsburg, and only on one production line; all other production lines in Wolfsburg are at a standstill. When presenting its quarterly figures in August, the supplier Continental already warned that the shortage of semiconductors would slow down car production for the entire rest of


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