How Covid led to a $60 billion global chip shortage for automakers

This photo shows Ford 2018 and 2019 F-150 trucks on the assembly line at the Ford Motor Company’s Rouge Complex on September 27, 2018 in Dearborn, Michigan.

Jeff Kowalsky | AFP | Getty Images

Automakers across the globe are expected to lose billions of dollars in earnings this year due to a shortage of semiconductor chips, a situation that’s expected to worsen as companies battle for supplies of the critical parts.

Consulting firm AlixPartners expects the shortage will cut $60.6 billion in revenue from the global automotive industry this year. That conservative estimate includes the entire supply chain — from dealers and automakers to large tier-1 suppliers and their smaller counterparts, according to Dan Hearsch, a managing director in the New York-based firm’s automotive and industrial practice.

“All the way up and down the supply chain, everybody is out some portion of money,” he said. “This could be 10% of

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Bosch India Flags Severe Shortage Of Critical Components To Indian Automakers

The Indian unit of the world’s largest auto-parts supplier is grappling with a severe shortage of imported components, hampering its ability to cater to the automotive market demand in Asia’s third-largest economy.

“Imports of Bosch India Ltd. has been impacted with severe supply shortage for imported microprocessors (semiconductors), leading to reduced ability to deliver to the automotive market demand in India,” the company said in an exchange filing on Tuesday.

Bosch, which is a key supplier to most Indian automakers, said the steep escalation of demand in consumer electronics industry driven by safety and hygiene sentiments, coupled with the rise of 5G connectivity, has led to surge in global demand of semiconductors.

The supply crunch will have implications for India’s auto industry. “For a lot of OEMs (original equipment makers), they are the single-part vendors, and they have a lot of monopoly in the Indian market,” Puneet Gupta, associate director

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PH automakers’ group enjoy sustained sales uptrend in July

While the local automotive industry has yet to fully rebound from the huge slump caused by the turnout of events earlier this year, a major local carmaker’s group has opened the third quarter on a significantly positive note.

Based on the joint report by the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and Truck Manufacturers Association (TMA), vehicles sales for July reached 20,542, representing a 31.9 percent jump over the 15,578 units sold back in June.

However, it is still down by 35.4 percent when compared to the 31,810 units delivered in the same month last year.

On a year-to-date comparison, the group only rolled out 105,583 units—which is a 48.7 percent drop from the 205,945 units attained for the first seven months of 2019.

Motorcycle EDSA
Motorcycle EDSA

Despite all the negative numbers, CAMPI President Atty. Rommel Gutierrez expressed high hopes with the recent sales achievement

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With emissions deal, California takes aim at automakers’ alliance with Trump

California finalized its agreements with five major automakers aimed at upholding its stringent vehicle emissions standards against an effort by the Trump administration to roll the rules back.” data-reactid=”23″On Aug. 17, California finalized its agreements with five major automakers aimed at upholding its stringent vehicle emissions standards against an effort by the Trump administration to roll the rules back.

In doing so, the state delivered an unmistakable warning to the rest of the auto industry: California’s rules are likely to remain in place, and if you’ve got brains, you’ll join us.

The state carefully crafted its agreements with Ford, Honda, BMW of North America, Volkswagen Group of America and Volvo to keep them free from interference by the federal Environmental Protection Agency or anyone else in the Trump administration.

Both we and the companies consider this to be an enforceable agreement.

Mary Nichols, chair, California Air Resources Board


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