According to leading figures within the car industry, the semiconductor shortage should be resolved by the end of the year…
The End of the Semiconductor Shortage?
The general consensus amongst the car industry’s leading figures is that the global semiconductor shortage will be over by the end of 2022; with supply returning, more or less, to normal. However, this isn’t to say customers and manufacturers are past the worst of the situation. Indeed, manufacturers will still be prioritising their most profitable models over the coming months.
All evidence suggests that, were it not for the supply-chain issue, the automotive sector would be booming. Economies have begun to recover from Covid-related disruption, and consumers have an increased amount of spending power as a result. Demand for new vehicles is high, but it’s being frustrated by a limited range of models and reduced choice when it comes to in-car technologies.
Car Industry Poised for Growth
LMC Automotive estimates that manufacturers made 9.6 million fewer cars last year than they would have done, had semiconductors been more widely available. This year, it believes the car industry will make 4.8 million fewer vehicles than it otherwise would have done; a sure sign that the supply-chain is beginning to recover; but there’s still a long way to go before things return to normal.
Pete Kelly, LMC’s managing director, commented on the situation. He said, “demand is still outstripping supply, and that’s particularly acute in mature markets”. However, Paul Philpott, boss of KIA UK, has gone on record as saying that the company has got the biggest order bank it’s ever had.
Clearly, then, the global automotive industry will be in a relatively strong position; once the semiconductor shortage has been properly addressed.
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