North American automakers this year may be hit not only by a global shortage of semiconductor components, but also by the impact of power outages and logistics disruptions caused by frost. GM and Ford, according to experts’ forecasts, will have to cut their annual income by a third.
Representatives of Moody’s Investor Service shared their views on this topic, as Bloomberg notes. The business of automakers is already not distinguished by high margins, and the forced decline in production volumes and increased costs for the purchase of scarce components will put additional pressure on profit margins. At the General Motors corporation, it may drop to 3.4% by the end of the year, and at the Ford Motor company – to 1.8%.
According to the experts, the pre-tax revenues of both companies will also noticeably decrease compared to last year. The magnitude of the decline may exceed 30%, GM will eventually lose $ 2 billion, and Ford will lose about $ 2.5 billion in revenue. Next week, Ford will suspend operations in Canada where crossovers are assembled because there are not enough chips to make them. The downtime will last one week, but this is not the only example of such measures since the end of last year. In the first quarter, North American enterprises of all brands may reduce the production of cars by 350 thousand cars, as weather disasters will add to the shortage of chips. The consequences of these phenomena will be felt in the second quarter.
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