The pandemic-induced global chip shortage affecting the global automotive industry is evidently here to stay a lot longer than anticipated as a recent report by Automotive News suggests that the crisis will keep affecting car production until 2023.
This forecast comes from the IHS Markit, a globally recognized information provider based in the United Kingdom. Accordingly, the car industry is not expected to recover until the first or second quarter of the 2023 calendar year.
This implies that the global car industry will continue to bear losses worth billions of dollars for the entirety of the 2022 calendar year. The prices of the new cars are also likely to rise exponentially during this time, and production will shrink.
The report mentions that chip production is expected to reach stability by the third or final quarter of the 2022 calendar year but the delay in the rehabilitation of car production is still plausible as the tech industry also relies on these chips.
The dearth has led automakers to reduce their production capacity significantly, and many are considering wrapping up their operations from certain markets as a cost and resource-saving measure, albeit at the expense of regional sales.
Vehicle production is expected to decline by 6.4 percent, meaning that an estimated total of 5 million fewer vehicles may be produced globally during the current calendar year, and this percentage is likely to rise even further.