Automotive Industry Emphasizes Visibility
As with many other sectors, the supply chain of the automotive industry has come under increased scrutiny in recent years. Before the pandemic, “things had sort of been humming along,” said Edgar Faler, senior analyst for the Center for Automotive Research. Then the industry experienced a myriad of fresh challenges associated with the pandemic—from production shutdowns to semiconductor shortages. Those unexpected complications arrived as the industry was experiencing “an enormous transition” to electrification, Faler said.
As Yogesh Goswami, managing director, Deloitte Consulting, said, “We’ve all seen a tremendous amount of disruption in the automotive supply chain in the last couple of years.”
The recovery is ongoing.
“The industry is still working through all the disruptions due to the COVID-19 pandemic affecting production,” said Jason Miller, interim chair of the Department of Supply Chain Management at Michigan State University. “Using 2018 and 2019 assemblies as a baseline, from March 2020 through February 2023, we have a cumulative shortfall of light truck production of [approximately] 2.375 million units. This helps explain why inventories to sales for motor vehicle and parts dealers remain historically low. For example, through Q4 2022, inflation-adjusted inventories at motor vehicle and parts dealers were down 19% from Q4 2019 levels…