US carmakers expect impact of chip squeeze to linger through next year

The impact of the chip shortage will last into next year, and possibly even 2023, executives at two top US carmakers said, Report informs referring to FT.

Ford chief financial officer John Lawler said that while the automaker expects “the scope and severity” of the shortage to diminish, “the constraints on the chips will remain fluid through 2022, and they could extend into 2023.”

General Motors chief executive Mary Barra said that while she expected the worldwide semiconductor shortage to ease somewhat by the end of this year, the carmaker will feel the impact through the first half of 2022.

“We think [the shortage] will get better toward the end of the year, but I have to tell you, it still continues to be somewhat volatile,” Barra said.

The shortage squeezed sales and profits at both companies in the third quarter as dealers struggled with inventories too low to meet consumers’ demand for new cars and trucks.

Carmakers first began to feel the effect of the chip shortage last year when they tried to ramp up vehicle production after factory closures due to Covid-19. The shortage was later exacerbated by a plant fire at a major chipmaker, and in the third quarter the Delta coronavirus variant forced the idling of foundries in south-east Asia.

As carmakers have struggled to secure microchips, the number of vehicles that dealers have to sell has plummeted to historic lows.

“We are selling everything we can,” Barra said. “I wish we could sell more.”