Global carmakers could see 125 trillion won in sales loss

The automobile industry across the globe is expected to lose a whopping 125 trillion won from sales this year due to vehicle semiconductors in short supply. 　

As semiconductors used for vehicles have suffered a greater shortage than expected, this year will see a drop of 110 billion dollars or around 124 trillion won, which greatly exceeds an estimated loss of 61 billion dollars, in sales across the global car manufacturing industry, according to global consulting firm AlixPartners on Sunday.

This year’s output will decrease by as many as 3.9 million units, or 5 percent of last year’s global production quantities (78 million units), as lack of semiconductors has caused production disruption. 　

Mark Wakefield, global co-leader of AlixPartners' Automotive and Industrial practice, commented that semiconductor scarcities have recently got worse for various reasons – fire accidents at major global semiconductor facilities, cold snaps in Texas, droughts in Taiwan and COVID-19 situations, worrying that just minor shocks can shake up the roots of the car-making market.

South Korean car manufacturers are not free of disruption in production due to the global semiconductor shortage as well. Due to the semiconductor shortage, Kia plans to suspend the No. 2 Sohari factory in Gwangmyeong, Gyeonggi Province on Monday and Tuesday. Despite efforts to control supply and demand by allocating stacks of inventories to top-selling lines, Kia Motors has since the beginning of May reached its limits.

Hyundai Motor considers pausing some lines of the No. 5 Ulsan factory in charge of the Tuscan and the hydrogen-powered Nexo and the No.3 Ulsan factory, which produces the Venue. It has since early this year kept track of supply and demand in semiconductors on a weekly basis to determine whether to suspend its facilities.

“No one is sure when supply and demand can get back to normal,” said an industry insider. “With production lines met with setbacks, sales loss will only mount up for some time.”


bjk@donga.com