Supply Chain Snarls Could Cost Automakers $210 Billion This Year, Forecast Finds
Global automakers could lose $210 billion in revenue this year because of supply chain disruptions, nearly double a forecast earlier this year, consulting firm Alixpartners said Thursday. Reuters reports that a shortage of semiconductors is just part of the problem, Alixpartners said in a new forecast. High prices and tight supplies of commodities such as steel and plastic resin are driving up costs and forcing automakers to curtail production. Automakers are on track to lose production of 7.7 million vehicles in 2021, according to the new forecast. Alixpartners advises automakers on supply chain and other issues. In May, the firm predicted automakers would lose $110 billion in revenue and fall 3.9 million vehicles short of production plans for the year. Read more here (Source: Reuters).
More Exit Vehicle Hunt as Prices Soar and Options Dwindle, Study Says
More would-be vehicle buyers are exiting the market, according to research posted Wednesday by Cox Automotive and Kelley Blue Book. Automotive News reports that most of those sitting on the sidelines, at least temporarily, are well aware that the market — which is short on inventory and high on pricing — is being affected by a shortage of microchips. The research defined would-be vehicle shoppers as consumers who intended to purchase within a year. It included interviews with 266 consumers in April and another 173 in August. The August survey found that 48 percent of consumers were choosing to postpone a purchase, up from 37 percent in April. Of those consumers who said they were stepping back from the market in August, 80 percent said they planned to be sidelined for between three and 12 months. In April, that figure was at 60 percent. Read more here (Source: Automotive News).
White House Pushes Companies to be Transparent on Chip Supplies
The Biden administration is pressuring companies involved in the semiconductor supply chain to be more transparent as the global chips shortage continues to wreak havoc across many industries, officials said. According to Automotive News, Commerce Secretary Gina Raimondo and National Economic Council Director Brian Deese will convene several companies Thursday to discuss how to respond more rapidly to shutdowns around the world, brought about by the spread of the coronavirus, and what comes next for legislation to finance domestic manufacturing that’s lingered on Capitol Hill for months. Representatives of companies including the Taiwan Semiconductor Manufacturing Co., Samsung Electronics Co., Apple Inc., Intel Corp., General Motors, Ford Motor, and Stellantis are to attend, according to people familiar with the planning. Read more here (Source: Automotive News).
Sonic Adds 6 States to Footprint with RFJ Auto Purchase
In a late-July interview with Auto Remarketing, Sonic Automotive president Jeff Dyke discussed the group’s potential for expansion in regions of the country where it wasn’t yet operating. Such growth came to fruition in a big way Wednesday, as Sonic announced it has agreed to purchase RFJ Auto Partners for $700 million — a move set to give the Charlotte, N.C.-based dealer group a presence in six new states: Washington, Idaho, Montana, New Mexico, Indiana and Missouri. The transaction would also bring in five new brands to Sonic’s lineup — Chrysler, Jeep, Dodge, RAM, and Mazda — and bump Sonic’s franchised dealer store count above 100. “This transaction is well-aligned with our strategy to grow our franchised dealership business by acquiring franchises that increase our geographic reach and expand our brand portfolio,” Dyke said in Wednesday’s news release. Read more here (Source: Auto Remarketing).
Semifinalists Named for 2022 Car, Truck, Utility Vehicle Awards
Eight cars, six trucks and nine utility vehicles were named as finalists for the North American Car, Truck and Utility Vehicle of the Year (NACTOY) Awards at the inaugural Motor Bella event at the M1 Concourse in Pontiac, MI, reports WardsAuto. The semifinalists were voted in from an initial list of 36 eligible vehicles identified earlier this year. The next step in the process is an annual comparison drive that will take place Oct. 18-21, when jurors will evaluate the semifinalist vehicles before voting to select the three finalists in each group. The finalists will be announced Nov. 17 at the LA Auto Show, and winners will be announced in January 2022 during an event hosted by the Detroit Auto Dealers Assn. in Detroit. Read more about the semifinalists here (Source: WardsAuto).
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