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AlixPartners Sees Chip Shortage Costing Auto Industry $210B

September 23, 2021

AlixPartners released its latest forecast regarding how much the ongoing semiconductor shortage is costing the worldwide automotive industry. The firm’s updated estimate is that the shortage will cost the industry globally $210 billion in lost revenues this year, up markedly from its estimate in May of $110 billion. In terms of vehicles, AlixPartners is now forecasting that production of 7.7 million units will be lost in 2021, up from 3.9 million in its May forecast.

“Of course, everyone had hoped that the chip crisis would have abated more by now, but unfortunate events such as the COVID-19 lockdowns in Malaysia and continued problems elsewhere have exacerbated things,” said Mark Wakefield, global co-leader of the automotive and industrial practice at AlixPartners. “Also, chips are just one of a multitude of extraordinary disruptions the industry is facing—including everything from resin and steel shortages to labor shortages. There’s no room for error for automakers and suppliers right now; they need to calculate every alternative and make sure they’re undertaking only the best options.”

Dan Hearsch, a managing director in AlixPartners’ automotive and industrial practice, added, “There really are no ‘shock absorbers’ left in the industry right now when it comes to production or obtaining material. Virtually any shortage or production interruption in any part of the world affects companies around the globe, and the impacts are now amplified due to all the other shortages. That’s why it’s critical that companies be armed with good information and analysis to begin with, and that they follow through with flawless, determined execution.”

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