The Strategist

General Motors profits fall by 40% due to chip shortages

10/28/2021 - 05:51

General Motors (GM), the largest US automaker, presented its financial statements for the third quarter.

Myles Regan
Myles Regan
The corporation's profit for the period fell by 40%, to $2.4 billion, and revenue fell by almost a quarter, to $26.8 billion. These results were slightly better than analysts' expectations, nevertheless GM shares fell in price by 5% after the publication of the statements.

As in the case of other automakers, the reason for this decline was a shortage of microchips. GM's vehicle deliveries in the third quarter were nearly one-and-a-half times lower than last year at 423,000 vehicles.

Last week, France's Renault doubled its forecast for production losses due to chip shortages, saying it could produce about 500,000 fewer vehicles this year due to chip shortages. AlixPartners, a consultancy, predicts the chip shortage will cost the global auto industry $210 billion in lost revenue.