According to car industry analysts, the global chip shortage will last until 2023.

ByFaisal Chughtai | Published date:
according-to-car-industry-analysts-the-global-chip-shortage-will-last-until-2023

According to Automotive News, the pandemic-induced worldwide chip shortage plaguing the global automobile industry is here to stay for far longer than expected, which estimates that the issue will continue to impact vehicle manufacturing until 2023.

IHS Markit, an internationally renowned information company headquartered in the United Kingdom, provided this prediction. As a result, the automotive sector is not projected to recover until the first or second quarter of 2023. This means that the global automobile sector will continue to lose billions of dollars for the whole calendar year of 2022. During this period, new vehicle costs are expected to increase rapidly, and manufacturing will decrease.

According to the study, chip production is anticipated to stabilize by the third or fourth quarter of the 2022 calendar year. However, a delay in vehicle manufacturing is still possible due to the tech industry's reliance on these chips. Due to the scarcity, automakers have reduced their manufacturing capacity considerably. Several are contemplating shutting down operations in particular regions to save money and resources, although at the price of regional sales.

Vehicle production is projected to fall by 6.4 percent, implying that 5 million fewer cars would be manufactured worldwide in the current calendar year, with the proportion likely to increase even higher.

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