AGL 5.39 Decreased By ▼ -0.11 (-2%)
ANL 8.60 Decreased By ▼ -0.09 (-1.04%)
AVN 75.61 Decreased By ▼ -0.23 (-0.3%)
BOP 5.17 Decreased By ▼ -0.01 (-0.19%)
CNERGY 4.46 Decreased By ▼ -0.05 (-1.11%)
EFERT 81.40 Increased By ▲ 0.31 (0.38%)
EPCL 49.75 Decreased By ▼ -0.25 (-0.5%)
FCCL 12.60 Increased By ▲ 0.07 (0.56%)
FFL 5.53 Increased By ▲ 0.01 (0.18%)
FLYNG 6.90 Decreased By ▼ -0.05 (-0.72%)
FNEL 4.61 Decreased By ▼ -0.04 (-0.86%)
GGGL 8.53 Decreased By ▼ -0.05 (-0.58%)
GGL 14.20 Decreased By ▼ -0.05 (-0.35%)
HUMNL 5.45 Decreased By ▼ -0.14 (-2.5%)
KEL 2.60 Increased By ▲ 0.06 (2.36%)
LOTCHEM 27.85 Decreased By ▼ -0.13 (-0.46%)
MLCF 23.85 Increased By ▲ 0.15 (0.63%)
OGDC 71.24 Decreased By ▼ -0.40 (-0.56%)
PAEL 15.09 No Change ▼ 0.00 (0%)
PIBTL 4.84 Decreased By ▼ -0.05 (-1.02%)
PRL 15.58 Decreased By ▼ -0.23 (-1.45%)
SILK 1.04 Decreased By ▼ -0.03 (-2.8%)
TELE 9.00 Increased By ▲ 0.06 (0.67%)
TPL 7.04 Increased By ▲ 0.01 (0.14%)
TPLP 18.13 Decreased By ▼ -0.18 (-0.98%)
TREET 20.60 Decreased By ▼ -0.43 (-2.04%)
TRG 134.90 Increased By ▲ 0.35 (0.26%)
UNITY 16.72 Increased By ▲ 0.09 (0.54%)
WAVES 9.25 Decreased By ▼ -0.07 (-0.75%)
WTL 1.34 Decreased By ▼ -0.02 (-1.47%)
BR100 4,145 Decreased By -10.2 (-0.25%)
BR30 15,259 Decreased By -29.4 (-0.19%)
KSE100 41,530 Decreased By -83 (-0.2%)
KSE30 15,342 Decreased By -18.1 (-0.12%)
Business & Finance

Chip shortage to cost automakers $110 bln in revenues in 2021 - AlixPartners

  • The chip crunch has driven home the need for automakers to be "proactive" right now, and create "supply-chain resiliency" longer term to avoid disruptions in the future, the firm said on Friday.
Published May 15, 2021
Follow us

The global semiconductor chip shortage will cost automakers $110 billion in lost revenues this year, up from a prior estimate of $61 billion, consulting firm AlixPartners said, as it forecast the crisis will hit the production of 3.9 million vehicles.

The chip crunch has driven home the need for automakers to be "proactive" right now, and create "supply-chain resiliency" longer term to avoid disruptions in the future, the firm said on Friday.

Automakers have in the past had direct supply agreements with producers of certain raw materials, including precious metals such as palladium and platinum, used in exhaust scrubbing systems.

The more direct approach to securing precious metal supplies was launched after a supply and price disruption in that market.

Automakers are now looking at developing direct relationships with semiconductor makers, said Mark Wakefield, co-leader of AlixPartners' global automotive practice.

"These things are shocked into existence," he said.

Automakers have been reluctant in the past to make long term commitments to buy semiconductors or other raw materials and take on the financial liabilities for such agreements, Wakefield said.

Now, "the risk is real. It's not a potential" risk of losing production to semiconductor shortages, he added.

Separately, Ford Motor Co (F.N) said on Thursday it is redesigning automotive parts to use more accessible chips, in response to the global semiconductor shortage.

Comments

Comments are closed.

Chip shortage to cost automakers $110 bln in revenues in 2021 - AlixPartners

Arshad Sharif’s killing: CJP takes suo motu notice

Intra-day update: rupee largely stable against US dollar

PM brings the economics of hydropower under govt focus

KP asks Wapda to pay Rs21bn

Govt debt stocks hit historic high of Rs50.152trn

Oil prices rise after price cap on Russian crude, OPEC+ meeting

Petrol, diesel and LNG at discounted rates: Russian ministers due next month

Revolving fund account for CPEC IPPs approved: ECC allows import of 0.583MTs of wheat

Payables/receivables: Govt offered to seek resolution of dispute thru ICA, KE CEO tells Senate panel

Auditors’ appointment: SECP decides to take risk-based approach