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General Motors expects the chip squeezing to continue next year

General Motors chief Mary Barra said although she was expecting shortage of semiconductor worldwide to slow down by the end of this year, the automaker will feel the impact in the first half of 2022.

This deficit reduced sales and profits in the third quarter as retailers struggled with much lower prices to meet consumer demand for new cars and vehicles. However, GM said it was planning to hit the end of the year with a review on changes made before the interest rates and taxes that it had set up two months ago.

“We think [the shortage] it will be fine by the end of the year, but let me tell you – it is still very volatile, “said Barra.

Third-party spending has dropped by 25 percent to $ 27bn, while pre-adjusted interest rates and taxes have dropped by 45 percent to $ 2.9bn. Adjusted operating costs fell to 10.9 percent, up from 14.9 percent last year.

Car manufacturers began to feel the effects of chip shortages last year as they tried to upgrade cars after the factory closed due to the Covid-19. This deficiency was later exacerbated by a wood fire on a large chipmaker, and in the third phase, Delta coronavirus strains forced damage to the foundation Southeast Asia.

As car manufacturers struggle to find microchips, the number of cars that sellers have to sell has dropped dramatically. GM also said earlier this month that retailers had sold 446,997 cars in the U.S. third-quarter, the third fall since last year.

“We sell everything we can,” Barra said. “I wish we had sold more.”

GM said it was “on track” to provide annual revenue, updated ebit “close to the end” of $ 11.5bn to $ 13.5bn offered in August. The company predicted in February an amount that would rise to $ 11bn.

Limited sales have allowed GM to charge higher prices for car dealers, and due to its smaller chip, the manufacturer has prioritized the collection of high-end luxury items such as cars and sports cars.

Wedbush expert Daniel Ives said “although chip shortages were a problem in the quarter (not surprising anyone) and shortages / production, we hope that dynamic improvements will become apparent to GM and the rest of the industry. 2022”.

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