The semiconductor shortage cost the auto industry at least 450,000 units of lost production just in January and February, analyst firm LMC said.
Pete Kelly, LMC managing director, said the issue would linger through the first half, but ultimately probably would not affect annual output.
He said, however, that the chip shortfall was different than other supply chain disruptions because the industry was competing with other bidders for semiconductor makers’ product.
“What’s different this time is that the lead times for additional capacity seem to be longer, and also there remains competition for that capacity from other industries,” such as consumer electronics, Kelly said in an online seminar on Thursday.
“This is likely to take longer to resolve than other previous supply chain disruptions” such as explosions, strikes or natural disasters, which normally play out in a quarter or two, he said. Still, he said, “most of the effects” should play out by the end of the year.
Kelly said that LMC is now forecasting that production will fall 10 percent globally in the first quarter – indexed against a base of 2019 — compared to a forecast of a 5 percent decline made in December. That translates to an overall loss of 1.1 million units, he said, with 600,000 to 700,000 due to the chip shortage and the remainder from renewed coronavirus lockdowns.
Another forecaster, IHS Markit, says 672,000 units of production will be lost in the first quarter because of the chip shortage.
“It’s a truly global issue,” Kelly said of the chip shortage, “but some places will do better than others if they have better access to the supply of semiconductors” such as Japan.
Buyers will either wait for the car they want or buy a different one, he said, if a desired model is unavailable.
Nearly every automaker has been touched by the shortage. Last week, Renault and Stellantis announced temporary plant closures.
Europe production is forecast to decline by 17 percent in the first quarter compared with 2019, by 10 percent in the second quarter, 2 percent in the third, then increase by 3 percent in the fourth quarter, Kelly said.
“This year isn’t quite going to be a catch-up year,” he said.
Global production fell by 17 percent in 2020, to 74.4 million units. It is expected to increase by 16 percent over 2020 to 86.9 million units, then grow to 92.2 million in 2022 and 95.7 million in 2023.