2023 Outlook for the Automotive Supply Chain

Jan 3, 2023 9:15:00 AM

The 2023 automotive supply chain is on the road to recovery, but there are still obstacles in its way. Those obstacles are causing frustration with the level of disruption taking place. The first reaction of many automotive manufacturers in the industry is to try to correct every issue, so disruptions can't happen again.

Unfortunately, there isn't a realistic way to create a completely resilient automotive supply chain that never experiences issues. The best way for auto manufacturers to move forward successfully is by instead focusing on a supply chain that is adaptable and flexible. That flexibility is what will matter when issues come up or future problems arise.

The Automotive Chip Shortage

New cars became harder to get, and used cars were in a lot higher demand, during shutdowns and lockdowns. That dynamic has persisted and will continue into 2023, as the supply chain issue with chips creates additional backlogs. Vehicles are shipping again, and some automakers are catching up, but delays still persist.

The ongoing automotive chip shortage is causing concerns for consumers, and that means automotive manufacturers are bearing the brunt of market frustration. But delivering a quality product still remains the end goal. Some manufacturers are considering the reduction of non-essential features that rely on these chips, in order to complete and ship vehicles more quickly.

Crucial Automotive Supply Considerations

It's not just the automotive chips that are the issue. There are other supplies that aren't coming in as needed due to shortages. That's forcing manufacturers to slow down production, delaying vehicles, and making adjustments to their plans. Those changes are keeping dealers from getting vehicles onto their lots and into the hands of consumers.

One of the areas of concern for automotive manufacturing in 2023 and beyond is the automotive film market. This film is an important part of completing a vehicle for production and sale, and it's used by automakers all over the world. Ensuring a strong supply of this film is vital to the quality and look of vehicles produced and shipped.

Supply Chain Bottlenecks Continue

Even with a reduction in systems that need computer chips, and changes to some other areas of the manufacturing process, there are still bottlenecks in the supply chain. This looks to be a persistent problem that will continue well into 2023, and possibly longer, depending on the demand for vehicles and manufacturers' ability to increase production levels.

The importance of good business practices is notable for every automotive parts manufacturer. With the right practices, there is a higher chance for more production. This will be a focus as 2023 advances since there are still areas where the manufacturing process is being slowed down by a lack of a particular item in sufficient quantities.

The surge of electric vehicles coming onto the market is also affecting the bottlenecks in the supply chain. There are new parts being created and adjustments to the production process needed to accommodate these vehicles. Without the societal changes of the last few years, the move toward more EV options may have been easier.

The push for EVs came at a time when other circumstances were seriously affecting the ability of automotive manufacturers to get what they needed for their current vehicle production plans. Manufacturing automotive parts takes time. Supply chain bottlenecks can be reduced when that time is accounted for with an understanding of potential issues.

Pragmatism is the New Key to Success

The goal for 2023 is to get the automotive supply chain to a better place for current efficiency and future security. While it isn't possible or realistic to fully protect the chain from problems at a later date, it is possible to reduce the chances. Being pragmatic is the way to reduce automotive supply chain issues.

With pragmatism, an automotive manufacturer can plan their supply chain in a more practical manner. It's easy to assume that everything that has been working well in the past will continue to work well in the future. But 2020 clearly showed that wasn't the case for many areas of society.

Automotive manufacturing was a hard-hit area due to the way it operates, the number of companies that come together to create vehicles, and the complex process of developing vehicles for the end-market consumer. A more pragmatic approach will serve the market well.

Work With a Trusted Supplier

Working with trusted and reliable suppliers is one of the best ways to keep your manufacturing process moving as smoothly as possible. Reach out to us at LINTEC Automotive today, and let us help you get the tapes, films, and adhesives your automotive supply chain needs.

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