Consulting firm AlixPartners said Sept. 23 that the ongoing semiconductor chip shortage will cost the global automotive industry $210 billion this year, a greater revenue loss than previously thought.
That figure is up considerably from the firm's May forecast, in which it estimated a loss of $110 billion.
AlixPartners also says production of 7.7 million vehicles could be lost. That's nearly double the 3.9 million vehicles the firm estimated would be lost when it issued 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," Mark Wakefield, global co-leader of the automotive and industrial practice at AlixPartners, said in a statement.
One problem is there are virtually no "shock absorbers" left in the industry for production or obtaining material, said Dan Hearsch, a managing director in AlixPartners' automotive and industrial practice.
"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," Hearsch said in a statement.
The changing forecasts have some suppliers already adjusting their outlook for this year. Faurecia SA, a French injection molder of key interior and exterior parts, cited a similar update from IHS Markit as it announced a lower expectation on Sept. 23.
IHS now expects the global auto industry to turn out 72 million cars in 2021, vs. an August forecast of 76.8 million, Faurecia noted in a news release.
"Faurecia's financial guidance for 2021 was explicitly based on the assumption of 76.6 million vehicles produced in the full year," it noted.
The company now expects sales of 15.5 billion euros ($18.2 billion) for 2021, vs. an earlier prediction of 16.5 billion euros ($19.3 billion).
The new forecast is similar to the 14.5 billion euros ($17 billion) in sales for Faurecia in 2020 when the pandemic shut down auto production for weeks. Prior to COVID-19 disruptions, Faurecia had posted annual sales of about $20 billion.
Rhoda Miel of Plastics News contributed to this report.