Chip deficiency expected to cost the auto industry $210 billion in income in 2021

With no end in sight, the semiconductor chip lack is currently expected to cost the global automotive industry $210 billion in income in 2021, as indicated by counseling firm AlixPartners.

The forecast is almost double it past projection of $110 billion in May. The New York-based firm released an initial forecast of $60.6 billion in late January when the parts issue began making automakers cut creation at plants.

“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, in a statement.

AlixPartners is presently estimating that 7.7 million units of production will be lost in 2021, up from 3.9 million in its May forecast.

Automakers across the globe, including Ford Motor and General Motors, had cautioned of enormous earnings cuts this year because of the chip deficiency. In any case, a few, if very little, of those misfortunes have been offset by versatile customer demand and higher benefits from record vehicle costs.