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Since the onset of the chip shortage, automakers have been committed to using whatever chips they have available to keep building their most popular vehicles. But now, Ford (F) and Stellantis struggle to deliver complete pickup trucks to their dealers.
“They’ve tried really hard to allocate the chips they get to high demand, high profit margin vehicles,” said Michelle Krebs, senior analyst at AutoTrader. “But that’s clearly the challenge right now.”
Ford has announced that it has started building the nation’s best-selling vehicle, the F-150 pickup, without some of the chips it needs. It will park those unfinished trucks while waiting for the missing chips to arrive, rather than shipping them to dealerships.
The company also temporarily shut down one of three shifts at the Kentucky Truck plant where the full-size Expedition and Navigator SUVs, as well as the Super Duty pickup trucks, are built.
Stellantis, the automaker resulting from the merger of Fiat Chrysler and the French PSA group, is doing the same with the Ram 1500 Classic pickup, a basic version of this truck.
The good news for Stellantis is that Ram pickup sales may not be wiped out, or at least not right away. Krebs said Stellantis has an oversupply of the Ram 1500 Classic – worth around 143 days. This compares to an average of a 59-day supply for full-size pickup trucks in the industry.
The global chip shortage
The chip shortage has hurt automakers around the world. Automakers slashed orders for computer chips early last year when the pandemic caused temporary plant closures and dragged down auto sales and production. Electronics manufacturers, which saw strong sales during the pandemic, have fortunately caught up with the oversupply.
But when car sales rebounded earlier than expected, it left the industry in the throes of a chip shortage.
The average car contains between 50 and 150 tokens. Some chips can be used in many different models, which has allowed automakers to maintain production of trucks and SUVs until now. But there are other chips specific to each type of vehicle.
General Motors and Ford have both warned investors that the chip shortage will cut their 2021 profits by more than $ 1 billion.
Krebs said automakers were also facing problems due to delays at ports across the country, preventing container ships from offloading auto parts shipments. These issues taken together could limit auto sales in the United States, she said.
“The supply chain is quite fragile,” she said. “We have conservative sales forecasts due to tight inventory.”
GM (GM) has kept three factories in North America closed since early February, and the automaker said they will remain closed for at least next month. These factories don’t build full-size pickup trucks or SUVs, but the chip shortage has also led GM to tinker with its large lineup of vehicles.
GM confirmed last week that it would build certain versions of the Chevrolet Silverado and GMC Sierra without a fuel management module that improves mileage by about 1 mile per gallon. Chips cannot be added to trucks after the fact, so they will be shipped to dealerships without chips.
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