Automotive Industry Forecast: Chip Shortage Continues Until 2023

Automotive Industry Forecast: chip shortage continues until 2023

The new crown pandemic has subverted the supply chain of almost every industry, and the automobile industry is one of the most affected industries. Although carmakers hope to recover millions of sales losses at the peak of blockade and stay at home in 2020, the shortage of semiconductor chips is making it impossible. Now, for carmakers, the hope of correcting the chip shortage soon seems slim.

Automotive News reported a new forecast by IHS Markit on Wednesday. The company predicted that the automotive industry would not enter the recovery stage until the first half of 2023. This could mean a full year of inventory shortages and higher prices, although the forecast also indicates that chip supply will stabilize in the second half of 2022.

However, these do not bode well for carmakers. New research shows that car buyers began to withdraw from the market and give up, causing the company to lose sales. Buyers are now more willing than ever to postpone buying in the event of a shortage of inventory, just because they can't find what they want. Others are even willing to give up their brand loyalty to buy a new car - which is bad news for carmakers looking for repeat customers.

Overall, it is predicted that carmakers will lose 6.2% of their predicted production capacity, that is, car production will be reduced by 5 million this year. Although suppliers and carmakers still hope to avoid the supply crisis by the end of this year, this has not happened.