By Joseph White

DETROIT (Reuters) – 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.

Alixpartners stated that the shortage of semiconductors was only one part of this problem in its latest forecast. Automakers are forced to cut production due to high costs, tight commodities like steel and resin.

According to new projections, automakers will lose 7.7 million units in 2021. Alixpartners provides advice to automakers regarding supply chain issues and other matters.

According to the firm, automakers will lose $110billion in revenue this year and produce 3.9m less vehicles than planned.

This grim forecast is coming amid concerns from commercial truck and automakers that commodity price spikes and semiconductor shortages will not ease as 2021 enters its last months. Industry executives had expected this to happen.

IHS Markit has lowered its 2021-2022 global automotive industry production forecast last week.

Vehicle sales in the U.S. have been slowing due to a lack of inventory on dealership lots. This is less than half of the usual levels. Dan Hearsch from Alixpartners’ auto practice, stated that inventories are about 20 days supply.

Hearsch said that he had assumed in the first quarter that we would return to normal and increase volume. It is unlikely that this will happen.

He stated that the automakers might have low inventories through 2022 or 2023.

Supplies of semiconductors have been hit in the past few months by a COVID surge in Malaysia https://www.reuters.com/technology/malaysian-chip-makers-still-struggling-meet-demand-association-says-2021-08-26, which has hobbled production at important suppliers.

He said that backlogs in major U.S. ports have been hindering auto makers’ efforts to import more steel and plastic resins.

Hearsch explained that automakers now have longer-term contracts to ensure supplies are secure. Some even buy up to 40 to 50 weeks ahead.

He said, “They’re signing up for things that they wouldn’t have done one year ago.”