Following a tumultuous 2020 in which the pandemic and its associated global lockdowns saw economic activity plunge, the automotive industry would have been looking forward to an encouraging recovery in 2021, were it not for the global semiconductor chip shortage, which has scuppered production schedules around the world.
Worst of all, there doesn’t appear to be an end in sight, with a BMW exec recently describing the situation as “really critical”. According to Reuters, BMW production head Milan Nedeljkovic said that the outlook for the second half of 2021 remained critical. “The … initial assumption, that it will be brought under control fairly soon and be covered more or less in the first half of the year, is difficult,” Nedeljkovic.
Reuters reports that BMW has lost output of around 30 000 units so far this year, with more to follow as production was still being halted at various factories around the world, on a daily or individual shift basis.
The chip shortage has affected car companies around the globe. According to the Detroit Free Press, “tens of thousands” of new vehicles are sitting in parking lots, waiting to have semiconductor chips installed before they can make their way to dealerships. An industry body believes that the chip shortage will scupper production to the effect of nearly 1,3 million vehicles in 2021, in the US alone. On the other hand, General Motors boss Mary Barra said she believed that the second half of 2021 would see semiconductor chip supplies returning to normal, the Detroit Free Press added.
The semiconductor chip shortage is believed to have been caused by the increased demand for electronic devices that occurred during the COVID-19 pandemic.