Automotive industry is sinking, used cars will rise in price

Automotive industry is sinking, used cars will rise in price

Due to the ongoing chip shortage, the estimated losses to the auto industry in 2021 will rise from $ 61 billion to $ 110 billion, according to AlixPartners. The specialists believe that so far there are no signs of an improvement in the situation in the short term.

Production of global automakers will be cut by 3.9 million vehicles this year. This is much more than the 2.2 million vehicles projected four months ago. According to AlixPartners forecasts, this is approximately 4.6% of the total annual production of 84.6 million vehicles.

Lately, many automakers have reported chip shortages in their financial statements. Both Ford Motor and General Motors forecast huge losses in the second quarter as they are forced to suspend production due to a lack of necessary parts.

Ford recently cut production at two of its factories and said it could cut profits by $ 2.5 billion this year due to chip shortages. General Motors said it could lose $ 2 billion in profits.

The situation is unlikely to improve in the third and fourth quarters of this year. The shortage of microcircuits will lead not only to a decrease in sales, but also to a further increase in the prices of used cars.

Automotive industry is sinking, used cars will rise in price

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