Data forecasting firm IHS Markit said global light-vehicle production could be cut by 6.2 percent — about 5 million vehicles — in 2021.
That is the largest single adjustment to its outlook in the last nine months, the firm said Thursday. It follows losses of millions of units of production in the first three quarters of 2021.
The outlook for the fourth quarter continues to worsen among executives and analysts. The pessimism stems from a heightened risk of challenges to the supply chain, such as the global semiconductor chip shortage.
And for 2022, the light-vehicle production forecast was cut by 9.3 percent, or about 8.4 million vehicles. IHS Markit also reduced its 2023 forecast, by 1.1 percent, just over 1 million vehicles.
IHS Markit now estimates output at 75.8 million vehicles this year and 82.6 million in 2022.
The revisions reflect the challenge the auto industry has faced as it grapples with one supply chain issue after another.
The industry slashed chip orders too much during 2020’s initial COVID-19 pandemic lockdowns, ceding its spot in line to sectors that saw demand surge when consumers were forced into quarantine. Then came winter storms in Texas, a factory fire in Japan and COVID-19 outbreaks in Southeast Asia.
The latest disruption originated in Malaysia, a hot spot for semiconductor packaging and testing. The government there has implemented rolling lockdown measures that may prevent the industry from returning to full capacity until late October, IHS Markit said.
Analysts who regularly riff on IHS Markit’s monthly revisions expressed shock Friday.
“The ’22 cut was the big surprise,” Credit Suisse’s Dan Levy wrote. “As far as we can tell it was IHS’s largest-ever cut for an annual forecast.”
Bloomberg contributed to this report.