"Global Auto Industry Faces 250 Trillion Won Loss Due to Semiconductor Shortage"

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kim Suhwan] As the global semiconductor supply shortage continues, the global automobile manufacturing industry is expected to suffer a sales loss of $210 billion (approximately 247 trillion KRW) this year.

On the 23rd, Bloomberg News cited data from consulting firm AlixPartners, reporting that automobile manufacturers are expected to produce about 7.7 million fewer vehicles this year than originally planned.

This figure is nearly double the previously estimated underproduction of 3.9 million vehicles by AlixPartners.

Earlier, AlixPartners had forecasted that the automotive industry would incur losses of about $61 billion (approximately 72 trillion KRW) due to the semiconductor shortage at the beginning of the year, but revised this upward to $110 billion (approximately 130 trillion KRW) in May.

This means the industry's projected losses have nearly doubled in just four months.

Dan Hearsch, Director at AlixPartners, said, "There is no inventory left. There is nothing more to use," adding, "Sales impact will worsen going forward."

He predicted, "Until now, production could be maintained because there was some semiconductor inventory, but once all semiconductor inventory is depleted, production volume will also change."

In fact, semiconductor lead times (the period from production to shipment) have been continuously increasing.

According to data released on the 21st by Susquehanna Financial Group, semiconductor lead times reached 21 weeks last month, an increase of 6 days compared to the previous month.

Director Hearsch said, "The ripple effects of the semiconductor shortage are impacting all sectors."

Earlier, major automobile companies also expressed concerns about this semiconductor shortage.

Traton SE, a truck manufacturing subsidiary under Volkswagen Group, issued a statement saying, "The impact of the semiconductor shortage on Traton is growing," and "As a result, sales volume is expected to be lower than originally planned."

[Image source=Reuters Yonhap News]

As automobile production fails to keep up with demand, car prices are also rising sharply.

Cox Automotive reported that the average car sale price in the United States reached a record high of $43,355 (approximately 51.09 million KRW) last month.

Due to the shortage of car inventory, some car dealers are even using used cars to fill their showrooms, Director Hearsch said.

He added, "To be honest, the situation is not improving," and "The production issues in the automotive industry are expected to last longer than anticipated."

This content was produced with the assistance of AI translation services.