Industry News
| Auto industry experts: chip shortage likely to last through 2023 |
| FLINT, Mich. (WJRT) - General Motors third quarter earnings are down roughly 40% from third quarter reports from last year.
Supply chain issues, especially the ongoing semiconductor chip shortage, is certainly playing a big part in that.
At the same time, the automaker has announced that beginning Nov. 1, none of its North American plants be idled because of the chip shortage.
For the last eight months, many of its plants have been temporarily idled because of the shortage, which includes Flint Assembly earlier this year Production certainly is still full throttle.
Officials at General Motors said that the automaker has started to move and deliver some of its parked inventory, namely trucks in Flint that have been awaiting chips.
So, there are some signs of progress.
It’s no secret the semiconductor chip shortage has wreaked havoc on the automotive industry.
Automakers struggling with supply chains to help meet a soaring consumer demand for trucks and SUVs.
Throw in a pandemic induced labor shortage, hurricanes, tsunamis and COVID-19 shutdowns, and a problem arises that’s going to be sticking around for some time.
She points out that this chip shortage is likely to last through mid 2023, and that’s leaning on the conservative side.
Something else to ponder, General Motors has committed a $35 billion investment to produce 30 new electric and autonomous vehicles by 2025.
That means more chips. A lot more chips.
What it comes down to according to Dziczek, is a rather prolonged volatile environment in terms of supply chains, labor and production when it comes to the automotive industry.
The industry is also at a transformational crossroad.
“We’re moving to electrification. And electric vehicles have more chip content. High tech chip content. We’re only like 8% I think of the global market for chips goes to automotive. We’re tiny, we don’t have any kind of purchasing power there,” said Kristin Dziczek, the Senior Vice President at the Center for Automotive Research.
“We need a lot of resources from a lot of different places, and you can’t necessarily predict where the next one’s going to come from,” she said.
Again, forecasters predicting this chip shortage to last at least until mid to end 2023.
That means it’s likely that dealer inventories are going to be staying on the slim side as well, or at least while demand remains high for trucks and SUVS.
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