The pandemic upended supply chains in nearly every industry, and the auto industry is one of the worst affected. While automakers hoped to recover millions of lost sales incurred during the height of lockdowns and stay-at-home measures in 2020, the semiconductor chip shortage is making that impossible. And now, hopes of rectifying the silicon drought anytime soon looks highly unlikely for carmakers.
Automotive News reported Wednesday on a new forecast from IHS Markit, which predicts the auto industry will not enter a recovery phase until the first half of 2023. That could mean a whole additional year of inventory shortages and higher prices, though the forecast also foresees stabilization for chip supplies happening in the second half of 2022.
Still, those are not good signs for automakers. New research shows car buyers are starting to exit the market and give up, costing companies sales. Buyers are now more willing than ever to postpone a purchase amid inventory shortages, simply because they can't find what they want. Others are even willing to drop their brand loyalty to get into a new car -- more bad news for automakers counting on repeat customers.
In total, the forecast believes automakers will lose 6.2% of their predicted production capability, or 5 million fewer cars made this year. While there remained hope suppliers and automakers would be able to skate through the supply crisis towards the end of this year, it's not happening.