Semiconductor chip shortages continue, which have resulted in record-low inventories and now plunging sales. At the same time, other supply chain issues like steel and plastic shortages and rising prices are also causing problems for the automotive industry. According to Reuters, Alixpartners, a consulting firm that advises automakers regarding the supply chain, has almost doubled its prediction of how much money automakers will lose in 2021, to $210 billion.
Alixpartners expects automakers to fall a total of 7.7 million vehicles short of planned production this year. The chip supply has not increased by a large margin in the interim, as many had hoped. According to Reuters, Dan Hearsch (a managing director at Alixpartners), “We thought we would get back on track and increase volume in the fourth quarter.” Hearsch said, “That isn’t going to happen, ” pointing out that automakers are now buying 40-50 weeks ahead of schedule due to supply shortages. There are many opinions about when the shortage of semiconductor chips might end forcing Ford and other automakers to alter their supply chain strategy drastically.
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