Advertisement
UK markets close in 2 hours 10 minutes
  • FTSE 100

    7,961.32
    +29.34 (+0.37%)
     
  • FTSE 250

    19,888.72
    +78.06 (+0.39%)
     
  • AIM

    743.89
    +1.78 (+0.24%)
     
  • GBP/EUR

    1.1695
    +0.0026 (+0.22%)
     
  • GBP/USD

    1.2636
    -0.0002 (-0.02%)
     
  • Bitcoin GBP

    56,022.75
    +1,154.03 (+2.10%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • S&P 500

    5,249.39
    +0.90 (+0.02%)
     
  • DOW

    39,745.88
    -14.20 (-0.04%)
     
  • CRUDE OIL

    82.30
    +0.95 (+1.17%)
     
  • GOLD FUTURES

    2,225.90
    +13.20 (+0.60%)
     
  • NIKKEI 225

    40,168.07
    -594.66 (-1.46%)
     
  • HANG SENG

    16,541.42
    +148.58 (+0.91%)
     
  • DAX

    18,495.83
    +18.74 (+0.10%)
     
  • CAC 40

    8,218.27
    +13.46 (+0.16%)
     

Chip shortage to cost automakers $110 billion in revenues in 2021 - AlixPartners

FILE PHOTO: A researcher plants a semiconductor on an interface board during a research work to design and develop a semiconductor product at Tsinghua Unigroup research centre in Beijing

(Reuters) - The global semiconductor chip shortage will cost automakers $110 billion in lost revenues this year, up from a prior estimate of $61 billion, consulting firm AlixPartners said, as it forecast the crisis will hit the production of 3.9 million vehicles.

The chip crunch has driven home the need for automakers to be "proactive" right now, and create "supply-chain resiliency" longer term to avoid disruptions in the future, the firm said on Friday.

Automakers have in the past had direct supply agreements with producers of certain raw materials, including precious metals such as palladium and platinum, used in exhaust scrubbing systems.

The more direct approach to securing precious metal supplies was launched after a supply and price disruption in that market.

ADVERTISEMENT

Automakers are now looking at developing direct relationships with semiconductor makers, said Mark Wakefield, co-leader of AlixPartners' global automotive practice.

"These things are shocked into existence," he said.

Automakers have been reluctant in the past to make long term commitments to buy semiconductors or other raw materials and take on the financial liabilities for such agreements, Wakefield said.

Now, "the risk is real. It's not a potential" risk of losing production to semiconductor shortages, he added.

Separately, Ford Motor Co said on Thursday it is redesigning automotive parts to use more accessible chips, in response to the global semiconductor shortage.

(Reporting by Ankit Ajmera in Bengaluru and Joe White in Detroit; Editing by Amy Caren Daniel)