The Automotive Industry’s Supply Shortage, Its Recovering

The automotive industry is finally seeing a little light at the end of the tunnel, as its supply shortage issue is recovering almost completely.

Be it there are still shortages for some components, most automakers are now starting to receive a sufficient supply of semiconductor chips.

According to RHB Investment Bank Bhd's analyst, Jim Lim Khai Xhiang, the supply chain issue however still exists for certain companies.

Notably, for Bermaz Auto and Tan Chong Motor, but for the national brands, the supplies are rumoured to be recovering.

He said, "On average, car manufacturers manage to get a sufficient supply of chips, but some still lack components. The local automotive industry recorded strong sales in September with Perusahaan Otomobil Kedua Sdn Bhd (Perodua) selling 24,626 units, thus showing that the labour shortage at its component suppliers has been successfully resolved. Meanwhile, certain European car makers are still in short supply for wire harnesses, speakers and sensors."

All in all, stated Lim to Harian Metro, despite the industry expected to return to strength in the last two quarters of 2022, the weighting remains at a neutral level, "based on the cautious outlook for 2023, which can put pressure on investor sentiment."

Image Source: Semiconductor Engineering, McKinsey