Global car sales shrunk by 1.4 million this year due to chip shortage: Report

The latest report from forecasting agency AutoForecast Solutions (AFS) pointed out that global car sales have shrunk by about 1.4 million since the beginning of the year due to chip shortages. 

According to Automotive News, Truth About Cars, and other reports on Monday (11th), car sales at European assembly plants have dropped by about 747,000 units so far this year. Full-year forecasts show that car sales in Europe will be well below 1 million.

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Over a longer period of time, forecasts for car sales in the European region remain particularly bleak as legacy manufacturers begin to signal retreat. For example, the Volkswagen Group recently announced that it would prioritize building cars in the U.S. and China over the European Union.

In contrast, assembly plants elsewhere have experienced relatively few chip-related disruptions. North American plants only shrunk around 1,300 vehicles this week, with no further reductions reported in Asia, South America, the Middle East, and Africa. Asia is actually the region least affected by the semiconductor shortage and is expected to sell 420,500 fewer vehicles than planned for the full year.

But that doesn’t include China. While sales in the region did not appear to be affected by chip shortages, they were stumped by a sudden localized drop in productivity. Large-scale lockdowns in places like Shanghai due to the outbreak have created problems for parts suppliers and logistics companies operating in the region. China has also reinstated strict shipping restrictions that previously delayed the export of goods.

These decisions have upended global trade, and are likely to do so again likely to make an already bad situation worse. For now, the chip shortage in the region does not appear to be serious, with car sales only slashed by about 70,000. However, if factories are not allowed to operate normally, there could be serious repercussions for global supply chains.

(via)