Innovation
Article

How Auto Companies are Adapting to the Global Chip Shortage

by
MIT Sloan School of Management
July 7, 2022
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Summary

The global shortage of semiconductor chips has upended the car industry. The response, from retrofitting to reshoring, could help guide other sectors.

In 2021, hamstrung by the global microchip shortage, the automotive industry lost more than $200 billion. Eleven million fewer vehicles were produced; manufacturing plants idled. Ford suspended operation at some plants to focus efforts on truck assembly, where the margins are better.

“Dealer lots are empty,” said Jessica Kelly, who has spent more than 20 years in the automotive industry, most recently as the senior director of offering management in advanced driver-assistance systems at NI (National Instruments). “I’ve never seen anything like this before.”

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MIT Sloan School of Management
MIT Sloan School of Management

The MIT Sloan School of Management, in Cambridge, Massachusetts, is about invention. It's about ideas that are made to matter. At MIT Sloan, we discover tomorrow’s interesting and important challenges and opportunities. We go where we want to have impact.

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