After microchip crisis, worldwide tire shortage set to jolt auto industry

The COVID-19 pandemic has affected the world not just from a health standpoint but, almost every aspect of life. This includes economic activities. One industry in particular that has incurred major losses due to the outbreak is the auto industry.

Just recently, auto manufacturers faced hindrances due to the global shortage of computer chips. This shortage has already stalled the production of several automobiles around the world. Now Bloomberg reveals that the lack of tree plantations in Southeast Asia is foreshadowing a shortage of tires on a global scale.

Rubber is a resin harvested from the leaves of a specific tree. These trees are naturally occurring in South Asia, and the region is the main source of rubber used for the manufacturing of tires.

According to Bloomberg’s report, since the resumption of business activities around the world, the demand for tires has become tremendously high, without enough resources to produce enough tires. Due to the pandemic, rubber producers were unable to plant enough trees to meet contemporary demands.

Additionally, existing trees were also damaged or infected due to floods. These additional losses have caused an even greater shortage.

Even if they plant more trees now, the shortage will remain until the plant is ready for harvest. As per the report, it takes at least seven years for the leaves on rubber trees to mature.

Aside from the rubber shortage, the auto industry is expected to run into even more setbacks. This includes a shortage of containers, barriers in transportation, etc.

Tire prices from renowned brands are already sky-high in Pakistan. All these setbacks are bound to amount to an even greater price hike.