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Global Auto Report: Supply Shortages Still an Issue

Autosphere » Dealerships » Global Auto Report: Supply Shortages Still an Issue
Production delays are likely to persist for some time, particularly in markets like North America. PHOTO BMW

Scotiabank’s recent Global Auto Report sees “unbalanced” market conditions likely to continue for some time.

On July 26, Scotiabank released its latest Global Auto Report.

Highlighting some of the unique trends that have been impacting auto sales around the world, the report did uncover some significant findings, namely:

Looking at the month of June, the report revealed that overall global vehicle sales have remained largely flat during the first course of 2021.

With sales activity hovering between 70 and 72 million units (the report noting that prior to the onset of the COVID-19 pandemic, global auto demand stood at around 72 million units.

This represents a significant pullback from the 50 mn units witnessed during the first six months of the pandemic.

According to the report, much of that growth can be attributed to an early rebound in consumer spending in China and government stimulus in the U.S.

Surge in demand

In North America, a reluctance to return to public transit and stimulus measures have conspired to create a surge in demand for private vehicles.

Though juxtaposed to this, supply constraints have essentially resulted in a seller’s market.

As a result, limited inventory is likely to lead to modest declines in sales volumes going into the second half of 2021.

Though a return to more balanced conditions, is expected during 2022.

Facilitating that trend is the fact that semiconductor production is continuing to grow.

Sales for microchips in the U.S. were reported to be up 26% year over year during May.

Taiwan-based TSMC has forecast that semiconductor shortages are expected to wane during the third quarter of 2021.

Nevertheless, it is still expected to be some time before auto production ramps up.

Interestingly, the Scotiabank report revealed that 80% of North American vehicle manufacturing supply shortages is related to Ford, General Motors and Stellantis.

All due to their reliance on semiconductor chips from South and East Asia.

While Japanese automakers represent around 10% of the vehicle production shortage (most of their chips come from Japan).

In fact, the Ford F-150, North America’s bestselling vehicle is currently attributed to 10% of production delays alone.

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