Dubai – AlixPartners, the global consulting firm, today released its latest forecast regarding how much the ongoing semiconductor shortage is costing the worldwide automotive industry. AlixPartners’ updated estimate is that the shortage will cost automakers globally $110 billion in lost revenues this year, up markedly from the firm’s estimate in late January of $61 billion. In total, the firm is now forecasting that production of 3.9 million vehicles in total will be lost in 2021.
“The pandemic-induced chip crisis has been exacerbated by events that are normally just bumps in the road for the auto industry, such as a fire in a key chip-making fabrication plant, severe weather in Texas and a drought in Taiwan,” said Alessandro Missaglia, Managing Director, AlixPartners Middle East. “But all these things are now major issues for the industry—which, in turn, has driven home the need to build supply-chain resiliency for the long term. Long-term forecasting and releasing, strategic buffers, early-warning systems, and parts-design are a few tools and techniques to delay application specificity, taking a more active role down the supply tiers across many commodities.”
He added: “There are up to 1,400 chips in a typical vehicle today, and that number is only going to increase as the industry continues its march toward electric vehicles, ever-more connected vehicles and, eventually, autonomous vehicles. So, this really is a critical issue for the industry. Companies are currently focused on mitigating the short-term effects of disruption, which opens up an opportunity for long-term large-size investors to enter and position themselves in the segment. Most GCC countries aim to improve the volumes and quality standards of locally made goods and grow their export market’s value. The high-tech industry is a clear area of opportunity for establishing international industry hubs, with the additional upside of attracting talent and investment from overseas.”
About AlixPartners
AlixPartners is a results-driven global consulting firm that specializes in helping businesses successfully address their most complex and critical challenges. Our clients include companies, corporate boards, law firms, investment banks, private equity firms, and others. Founded in 1981, AlixPartners is headquartered in New York, and has offices in more than 20 cities around the world. For more information, visit www.alixpartners.com.
Contact:
Rawan El Saleh
Rawan.elsaleh@fgh.com
© Press Release 2021
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