Toronto, Ontario — Global car production is forecasted to increase in the second half of 2022 thanks to supply chain recovery, according to a report by, J.P. Morgan Research, a research wing of the international banking company.
Semiconductor and chip shortages are nearing the end and should become more readily available in the second half of 2022, according to the company. Specifically, increasing production of high end chips in smart phones and computers has been met with a decline in the demand for consumer electronics, allowing other industries to acquire this essential component.
However, J.P. Morgan highlights that available chips not be the right type to satisfy all demand, with Volkswagen suggesting that semiconductor supply is unlikely to meet auto industry demand until 2024. Variances in company production aside, chip availability will likely result in more cars arriving in local dealerships, even though not every company is churning out more vehicles.
But why is that?
Given that the chips used by automobiles differ from those in PCs and smartphones, this chip diversion may allow for the completion and delivery of partially assembled vehicles in 2021, a year where multiple automakers minimized luxury features due to chip shortages at the time.
“The capacity still needs to be qualified for use in the automotive industry. Can the right matching occur between available supply and correct qualification? This is the difficulty that remains,” said Sandeep Deshpande, head of European technology research at J.P. Morgan.