Building Resilience to Automotive Supply Chain Shortages with Software-Defined Vehicles

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By James Hodgson | 3Q 2022 | IN-6633

 

High Exposure to Hardware Shortages in the Automotive Supply Chain

NEWS


The automotive supply chain crisis, which traces its origins as far back as March 2020, continues to depress the new vehicle sales market. Successive geopolitical crises, including renewed Chinese lockdowns in early 2022 and the conflict in Ukraine, have extended the semiconductor shortage crisis, which began with Original Equipment Manufacturers (OEMs) cancelling orders in anticipation of an unprecedented demand contraction. Now, the looming energy crisis threatens manufacturing output as temperatures will begin to drop in Europe in a few months’ time. Germany, home to 945 OEMs or automotive component suppliers is particularly exposed, and it is currently expected that a shortage of natural gas would see residential heating prioritized at the expense of industrial output. As the crisis persists, it increases the risk of pent-up demand for new vehicle sales being eroded by high inflation, and interest rates being raised by central banks in response to increasing prices. This will add fuel to the fire that is the current collection of automotive s…

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