Why the Car Sector is in Crisis

A global microchip shortage is having a huge impact on the motor manufacturing sector, with many leading brands experiencing production delays – and in the UK, new car registrations for July are the lowest since 1998, down 29.5% year on year, according to trade body SMMT.

“The automotive sector continues to battle against shortages of semiconductors and staff, which is throttling our ability to translate a strengthening economic outlook into a full recovery,” said SMMT CEO Mike Hawes.

The world’s biggest producer, Taiwan’s TSMC has said the shortages will extend into 2022, while analyst IHS Markit estimates that the shortage will cost the industry $60billion in lost sales this year.

What are the reasons for the global shortage of microchips?

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