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More car factories are idle due to a shortage of chips — industry losses to reach $ 61 billion this year
Many of the world’s largest automakers are forced to suspend their factories in Asia, Europe and North America due to constant shortages of semiconductor chips, exacerbated by a fire at a key chip factory over the weekend.
Ford Motor, Toyota Motor, Volkswagen AG and Honda Motor are among those suffering from supply problems with the chips used in vehicles to control and manage components ranging from the engine and chassis to air conditioning and infotainment.
The chip shortage for the auto industry was originally fueled by the fact that auto sales first fell due to COVID-19 last year, and automakers cut semiconductor orders accordingly. The freed up capacities were immediately occupied by manufacturers of home electronics, for which demand grew rapidly during the pandemic. As a result, when demand for cars returned to normal, their manufacturers began to lack semiconductors. US winter storms have also affected semiconductor shipments, and the situation has worsened further this week after a fire damaged Renesas Electronics, a leading supplier of automotive chips.
Renesas / Kyodo
Analysts at Mitsubishi UFJ Morgan Stanley Securities in January already estimated that a chip shortage would reduce global car production by 1.5 million units, with Japanese automakers accounting for about a third of that.
Here are some of the latest news from the automotive industry:
- Hyundai Motor ditched weekend work that was in progress to get the Kona, Avante, Grandeur and Sonata models out of production;
- Honda has suspended production at six factories in the US, Canada and Mexico, citing chip shortages, congested ports and cold weather;
- Volvo introduced downtime days to all truck manufacturing operations, citing a “significant impact” of global semiconductor shortages;
- Ford stopped production at its Ohio plant until March 29 and moved the shift to Kentucky; the company also said that F-150 trucks and Edge SUVs will be assembled in North America without some parts and will only start shipping to dealers after electronics become available to them;
- Nissan Motor adjusts production at its US and Mexico plants;
- Toyota’s Czech plant, which makes Aygo compact cars for the European market, has been suspended for two weeks starting March 22 after an abnormal cold in the US disrupted chip production;
- Volkswagen halted production at its Portuguese plant from 22 to 28 March;
- Mitsubishi Motors reduced car production in the domestic market by 4-5 thousand units in March and revises production plans for April.
With the exception of Volkswagen, the stock prices of all of these automakers fell this week, with the S&P Supercomposite Auto Parts & Equipment Index down 10% from its peak on March 17.
Auto Industry May Lose $ 61 Billion in 2021 Sales Due to Chip Shortages (AlixPartners)
Renesas fire to shut down 300mm silicon wafer line for at least a month and likely to have a big impact on the automotive industry. The difficulty of the situation is evidenced by the fact that Toyota and Nissan sent workers to help with the restoration work.
“The automotive industry is key in Japan, so any incident that affects it has a big impact on the economy,” said Roman Schorr, director of Fitch Ratings. «Now the automotive industry has become highly dependent on the supply of chips, and in Japan, the production of these products has turned out to be too dependent on just one plant.».