Semiconductor shortages to impact auto industry recovery in 2021

GlobalData forecasts the global light vehicle market at 85.1 million units in 2021, 13.1% ahead of 2020’s pandemic-hit total. However, the year will be a tumultuous one for auto sales, with major market swings and considerable uncertainties ahead, according to Globaldata, a leading data and analytics company.

Calum MacRae, Automotive Analyst at GlobalData, comments: “In January, global vehicle market growth was provided by Asia-Pacific markets. All four major markets performed strongly – China up 21%, Japan up 7.1%, India up 10.1% and South Korea up 19%.

“These are the markets that we expect to power the industry through a difficult first quarter. Elsewhere, uncertainties about demand have been compounded by the global semiconductor shortage which vehicle makers expect to limit sales opportunities in the first quarter and negatively impact output.”

GlobalData estimates vehicle maker downtime announcements add up to around a 400,000-unit loss from forecast Q1 global vehicle production, but the opportunity cost – if the companies were producing to full capacity – is some 715,000. This leaves the Q1 revenue hit for the industry between US$12bn and US$22bn.

MacRae continues: “We expect the semiconductors shortage to ease significantly over the rest of the year, but 2021 is expected to be just as tumultuous at times as 2020 – at least on the surface. This will be particularly true in the first two quarters. Year-on-year market comparisons against extremely low bases will come into play in the first half. For example, our latest forecast sees a 16.7% increase in February’s sales numbers globally, followed by 53% in March and a whopping 74% in April.

“Beneath the headlines though, it will be a calmer and gradually improving underlying picture for the world’s vehicle market and industry as recovery strengthens through 2021. GlobalData’s automotive composite index – using alternative data sets such as M&A activity, financial filing sentiment, news sentiment and job hirings – continues to trend upwards and it’s proved to be a reliable indicator of sales progress through the pandemic.”

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