Supply Chain Problems hit Auto Industry


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Provided by Forbes

Sana Yan

Global supply chain problems has created a seller’s market in the auto industry. One sector that has been hit hard is semiconductor microchips. Today’s cars contain at least two dozen microchips in them which control automobile stability, fuel management, interactive screens, and car windows. Luxury cars may need 100 chip processors reports Sam Abuelsamid in Consumer Reports. Covid related factory shutdowns in 2020 has contributed to this supply chain problem. Tech companies like Intel and TSMC are reaching out to auto companies to help them produce microchips for their cars.

For now auto prices for Honda, Ford, Chevrolet, Hyundai and others will be very expensive. In addition, Abuelsamid stated, “Most automakers are facing production cuts, which in turn means a limited inventory of new products on dealer lots. Low inventory means reduced or nonexistent discounts and deals on new vehicles.”

Motor Trend reports that the auto industry lost $210 billion in revenue in 2021.

Anticipating problems at the end of 2020, big chains like Walmart and Home Depot imported goods earlier than usual. Louis Kuijs of Oxford Economics said, “Globally speaking, the worst is behind us in terms of the supply-chain problems.” (Wall Street Journal)