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HomeBusinessAutomotive supply chain shortages getting worse: GlobalData

Automotive supply chain shortages getting worse: GlobalData

09 September 2021: Analysis by GlobalData, suggests the disruption to the global auto industry’s supply chains caused by surging Covid-19 infection rates and lockdowns in southeast Asia is worsening.

“The next month or so will be a very big challenge for the industry,” says David Leggett, Automotive Analyst at GlobalData. “Automotive supply chain shortages are worsening right now and recovery to fulfill a lengthening backlog of orders will take some time.”

Major economies in southeast Asia, including Malaysia, Indonesia, Vietnam and Thailand, have been struggling with their worst coronavirus outbreaks and new lockdowns – since the pandemic began early last year due to the arrival of the highly infectious Delta variant.

Automotive component manufacturers across the region have been severely disrupted by the lockdowns, affecting Japanese vehicle manufacturers which have become increasingly dependent on suppliers based in low-cost countries across southeast Asia.

“The lockdowns have also compounded the acute shortages that already existed in the global semiconductor industry, forcing vehicle manufacturers to announce further production cutbacks,” Leggett points out.

Leggett adds “The Covid-19 pandemic has also exposed Malaysia’s importance in the global semiconductor supply chain. Strict lockdowns in the country in the last few months have made worse an already severely disrupted global semiconductor sector, significantly lengthening order lead times for chips and forcing automakers such as Toyota, Daihatsu, Ford and Mazda to announce extensive global production cuts in the third quarter of 2021.”

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