Finally, carmakers got a break. Those in the UK boosted their output by over 13% in February as supply-chain pressures subsided, especially the persistent global shortage in microchips, also known as semiconductors. This “signals an industry on the road to recovery”, declared UK motoring trade association the SMMT. Well, up to a point.
Early in the pandemic, carmakers slashed sales forecasts as demand for cars evaporated, falling 47% in US and 80% in Europe in the first couple of months of lockdowns. Carmakers couldn’t see how sales could rebound quickly, which was a reasonable assumption at the time. In an industry where everyone has their own version of lean or just-in-time manufacturing, where unsold inventories are seen as tantamount to incompetence, they quickly scaled back orders from their supply chain.
