Chip shortages are anticipated to price the auto trade $ 210 billion in 2021

Ford announced on Jan.

ford

With no end in sight this year, the ongoing semiconductor chip shortage is projected to cost the global auto industry $ 210 billion in sales in 2021, according to consulting firm AlixPartners.

The forecast is almost double the previous forecast of $ 110 billion in May. The New York-based company first released an initial forecast of $ 60.6 billion in late January when the parts problem began driving automakers to cut production at their plants.

“Of course, everyone was hoping the chip crisis would weaken by now, but unfortunate events like the COVID-19 lockdown in Malaysia and ongoing problems elsewhere have made things worse,” said Mark Wakefield, global co-head of automotive and industrial Practice at AlixPartners said in a statement.

AlixPartners now predicts 7.7 million production units will be lost in 2021, up from 3.9 million in the May forecast.

Automakers around the world, including Ford Motor and General Motors, warned of massive profit cuts this year due to the chip shortage. However, some, if not many, of those losses have been offset by robust consumer demand and higher gains from record vehicle prices.