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    New forecast says chip shortage to cost the car industry $210B


    The ongoing global shortage of semiconductor chips will hit carmakers harder than experts had initially forecast in May as COVID-19 continues to disrupt chip production.

    A new report released Thursday by consulting firm AlixPartners said the chips crisis will cost the global auto industry $210 billion in revenues this year. That’s almost double its  estimate in May of $110 billion. 

    In terms of production, AlixPartners forecasts that automakers will lose production of 7.7 million vehicles this year. In May, it had forecast a production loss of 3.9 million.

    “Of course, everyone had hoped that the chip crisis would have abated more by now, but unfortunate events such as the COVID-19 lockdowns in Malaysia and continued problems elsewhere have exacerbated things,” said Mark Wakefield, global co-leader of the automotive and industrial practice at AlixPartners in Southfield.

    The chips are used in a variety of car parts. The worldwide shortage started earlier this year, in part, as a result of the COVID-19 pandemic. As people increasingly worked from home and kids were home-schooled, the demand rose for the personal electronics that the chips are used in.



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