Largest automakers faced a global problem

Global shortage of semiconductors caused by the coronavirus pandemic, led crisis on the global automotive market – companies experience difficulties with buying key parts for their products. The Economist argues that the lack of chips will reduce the production of vehicles in 2021 and 2022, despite the fact that the demand for them is restored.

In the absence of semiconductors, it is impossible to install complex electronics into the car, which controls entertainment systems, safety functions and advanced driving facilities. Many corporations have reduced shifts on assembly conveyors, and some temporarily closed the factory. The representative of the Analytical Center Center Automotive Research believes that with such a tendency, world production of cars in 2021 will decrease by 5.2 million units compared with the previous year and will be 74.8 million.

The fact that the transport segment in the economy is experiencing a serious crisis, indicators published by the largest players in the market. The net profit of Ford in the second quarter decreased twice as compared to the same period last year – and the main reason was the lack of chips. Jaguar Land Rover awaits a drop in sales by 50 percent to the fall, and Stellantis, publishing Fiat, Peugeot, Chrysler, Opel and Citroën, said that this year will produce 1.4 million cars less than expected.

The shortage of the chip began with the onset of the coronavirus pandemic – it sharply increased the demand from the manufacturers of electronic devices, as many moved to remote work and began to surround themselves with household appliances for work and entertainment. Another reason for the crisis on the car market is that the company underestimated the rapid rates of restoration of demand for transport in 2020. Waiting for weak sales, corporations have reduced chip orders. There are about 10 percent of the world’s world demand for automotive concerns, and therefore chip manufacturers may not always be adjusted for the orders of the automotive industry. Therefore, now, when companies saw the readiness of buyers again acquire cars, it turned out enough of enough semiconductors anymore.

The fact is that large car firms have long passed the development of most technologies to outsourcing to large suppliers, such as Bosch or Denso from Japan. For the manufacture of the necessary components, these suppliers buy boards and microcontrollers from suppliers of the following, lower level, which, in turn, buy chips from the semiconductor manufacturers themselves. Such a production chain placed automotive companies to the distance of an elongated hand from the manufacturers of chips.

In July, Russian autocontracers suffered a drop in sales by 10 percent due to the lack of components. Chairman of the board of Avilon dealer Andrei Pavlovich noted that the worst lack of chips affected the production of the most modern models.

/Media reports.