The forecast is almost double the previous projection of $ 110 billion in May. The New York-based company first released an initial forecast of $ 60.6 billion in late January when the parts problem began causing automakers to cut production at factories.
“Of course, everyone had hoped the chip crisis would have eased further now, but unfortunate events such as the COVID-19 lockdowns in Malaysia and lingering problems elsewhere have exacerbated things,” Mark Wakefield, co- World leader in automotive and manufacturing practice at AlixPartners, said in a statement.
AlixPartners now predicts 7.7 million units of production will be lost in 2021, up from 3.9 million in its May forecast.
Automakers around the world, including Ford Motor and General Motors, had warned of a massive drop in profits this year due to the chip shortage. But some, if not many, of those losses were offset by resilient consumer demand and higher profits from record vehicle prices.