The Absence of Semiconductor Chips Is Grounding Factories in the Brazilian Automotive Market

The Semiconductor Chip Crisis Caused the Production of Several Factories to be Halted and More than 130 Thousand Vehicles, Only in Brazil, Were Not Sold in the Automotive Market

The semiconductor chip crisis, which is affecting the entire world, is creating a different automotive market in Brazil. The lack of new cars, factories with production of vehicles completely halted, long waiting lines, and models that previously had weak sales are now highly sought after. Additionally, prices for both new and used cars are rising.

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The Impact of Semiconductors on the Automotive Market

In factories, the lack of semiconductor chips decides which model will be manufactured and which will be set aside, all to prevent manufacturers from incurring significant losses. Thus, even the best-selling car may end up “on the bench.”

Therefore, models with higher added value go to the factory production line, as the loss is lower with them, but even with such strategic thinking, nothing prevents automotive manufacturers from losing huge volumes in sales in 2021.

BCG Study on the Semiconductor Crisis

In foreign countries, there are brands with hundreds of thousands lost, and this is just in one region. Brazil, on the other hand, could lose up to 260 thousand cars this year due to the lack of semiconductors in factories. This is what the Boston Consulting Group (BCG) study shows, which utilized data from the IHS Markit consultancy.

A month of lost sales in Brazil doesn’t even come close to BCG’s projection for the entire world. According to the study, 5 to 7 million cars will disappear in 2021, and so far, 3.6 million have not been produced.

Major Powers in the Automotive Market Suffer from the Crisis

In North America, countries lost 1.2 million sales in the automotive market because without semiconductor chips, there is no production in factories. Europe lost 875 thousand, and Asian countries, Japan and South Korea, have exceeded 770 thousand, meaning many cars are no longer on the road.

In Brazil, 130 thousand cars were lost just in the first half of the year, and in the rest of South America, another 30 thousand. The estimate is that automotive sales will improve in the second quarter of next year. With the electronics sector delivering only 4% above pre-pandemic orders, the industry is losing as it needs at least 15% chip ownership to gain an advantage.