HomeBusinessChip shortage recovery may not happen until 2023, auto industry forecast says

Chip shortage recovery may not happen until 2023, auto industry forecast says

Car buyers and automakers might not experience any kind of relief until 2022’s second quarter of 2022 when supplies begin to recover in 2023.

The epidemic disrupted the supply chain in almost every industry and the auto sector is among the industries that have been the most affected. Although automakers were hoping to recuperate millions of sales during the midst of lockdowns and stay-at-home measures for 2020 the shortage of semiconductor chips makes it impossible. Now, the possibility of resolving the shortage in silicon in the near future is highly unlikely for car manufacturers.

Automotive News reported Wednesday about a new forecast by IHS Markit, which predicts that the auto industry won’t be in a phase of recovery up to the beginning of 2023. It could be more year of stock shortages and higher prices, but the forecast predicts that there will be a stabilization of chip supply in the second quarter of 2022.

However, these aren’t an encouraging sign for automakers. Recent research suggests that car buyers are beginning to leave the market and abandon and causing companies to lose sales. Consumers are now more inclined than ever before to put off buying a car due to inventory shortages due to the fact that they are unable to find what they’re looking for. Some are even willing to give up their brand loyalty in order to purchase a new vehicle — which is bad news for automakers who rely on loyal customers.

Overall, the prediction is that automakers will be able to lose 6.2 percent of their forecast production capacity, or 5 million less cars produced this year. Although there was a chance that automakers and suppliers could be able to get through the supply shortage until the end of the year, that’s not happening.

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