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“We are monitoring the situation closely and adjusting production schedules to minimize the effects on our employees, suppliers, customers and dealers across Europe,” said a Ford spokesperson. “At this time, we do not anticipate any similar action at our other European facilities.”
Major semiconductor makers reallocated capacity from automakers last year after the pandemic slashed car sales, instead shipping chips to companies that produce smartphones, gaming systems, and other tech gadgets which remained in high demand. Supplies are always tight, and automakers are struggling to get the chips they need.
“Light vehicle manufacturers are seeing increased disruption in the delivery of semiconductor-based systems in the first quarter,” said Mark Fulthorpe, executive director of the IHS Markit automotive team, recently in a research note. “The situation is very fluid.”
The disruption comes at a critical time for automakers, which suffered a sales slump in the early months of the pandemic, but remain under intense pressure from global regulators to invest heavily in electric cars. Research firm Bernstein estimates global vehicle sales will increase 9% in 2021, following an expected 15% drop last year – but the chip shortage puts the recovery at risk.
According to analysts at UBS, the world’s largest automaker could lose production of 100,000 units in the first three months of the year, or about 4% of global quarterly production, due to component shortages.
“We are doing everything in our power to minimize production losses and to ensure that normal deliveries to customers can resume as quickly as possible,” Volkswagen Group purchasing manager Murat Aksel said in a statement on last month.
Audi said Monday it had laid off 10,000 workers due to the chip shortage, with production and working hours affected at factories in Germany and Mexico. Production of the luxury brand’s A4 and A5 convertible sedans was tentatively halted in Neckarsulm, Germany, until January 29.
“We are currently examining a range of countermeasures and alternatives designed to alleviate the impact of the supply bottleneck and, in turn, minimize the number of vehicles affected,” a spokesperson said. “Any improvement largely depends on the semiconductor industry.”
Fiat Chrysler said last week it would delay restarting production following a scheduled shutdown at its Toluca, Mexico plant that builds the Jeep Compass. It has also scheduled downtime at its Canadian plant in Ontario, which produces the Chrysler 300, Dodge Charger and Dodge Challenger.
Japanese automakers are also suffering. Toyota said it was forced to temporarily halt production at a plant in Guangzhou, China on Jan. 12 and was cutting production at a Texas plant that makes Tundra pickup trucks. Nissan and Honda have both said they are “adjusting” production in response to the shortage.
South Korea’s Hyundai said in a statement on Monday that it “is working to optimize the supply of parts to ensure stable production at each production center.”
Chinese factories could be the most affected
Production levels in Europe, North America, Japan and India are expected to be reached this quarter, according to IHS. But the biggest problem could be in China.
“At this point, with varying levels of visibility across the supply chain, the largest volume disruption is noted in Mainland China where, based on available information, the risk could be 250,000 units in Q1 “Said Fulthorpe.
Taiwan Semiconductor Manufacturing Company (TSMC), a major chip supplier, said last week that reducing the shortage was its “top priority.” “We are working closely with our automotive customers to resolve capacity support issues,” CEO CC Wei said at an investor conference Thursday.
– Jake Kwon, Junko Ogura, Jill Disis, and the CNN Beijing office contributed to this article.
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