Raw material and semi-conductor shortages are presenting new risks to the automotive supply industry in Q1 2021, according to the latest OESA Automotive Supplier Barometer survey.
The quarterly survey conducted by the Original Equipment Suppliers Association (OESA) saw the Supplier Barometer Index (SBI), which gauges business sentiment, inch down to 62 in the first quarter from 67 in Q4 2020.
According to original equipment manufacturers (OEMs) surveyed, the gap between production levels and their estimated breakeven point fell to 13.2 million units during the quarter. OEMs are also worried about the ongoing semiconductor shortage that has negatively impacted around 69pc of suppliers, according to the barometer.
More than half of the suppliers surveyed said their inventories fell in 2020 due to limited production especially in the first half of the year, and surging demand in H2 2020.
In Q1 2020, most suppliers attributed the challenges in internal and external production to supply chain issues such as increased costs due to limited supplies, freight surcharges, and a shortage of skilled labor. Together, these factors had a negative effect on OEM production, the survey noted.
On the positive side, suppliers said they were benefiting from innovation especially in the electric vehicle space though most of them expect that it will take EVs around 5-10 years before their production can account for 10pc of global vehicle output.