“We are closely monitoring the situation and adjusting production schedules to minimize the impact on our employees, suppliers, customers and dealers across Europe,” Ford’s spokesman said. “At the moment we do not expect any similar actions at our other European facilities.”
Leading semiconductor manufacturers last year increased the capacity of automakers after the pandemic reduced car sales, but instead sent chips to companies that manufacture smartphones, gaming systems and other technological devices that are still in high demand. The stock is still tight and carmakers are struggling to secure the chips they need.
“Light vehicle manufacturers are finding increasing disruptions in the provision of semiconductor systems in the first quarter,” Mark Fulthorpe, executive director of the automotive team at IHS Markit, said in a recent research note. “The situation is very fluid.”
The disruption comes at an important time for carmakers, which had a collapse in sales in the early months of the pandemic, but remains under intense pressure from global regulators to invest heavily in electric cars. Research firm Bernstein estimates that global vehicle sales will grow by 9% in 2021 after an expected 15% drop last year – but the scarcity deficit is jeopardizing the recovery.
According to UBS analysts, the largest manufacturer in the world could lose production of 100,000 units in the first three months of the year, or about 4% of global quarterly production due to the shortage of components.
“We are doing everything in our power to minimize lost production and to ensure that normal deliveries to customers can be resumed as soon as possible,” Murw Aksel, purchasing manager of Volkswagen Group, said in a statement last month.
Audi said on Monday that it had hit 10,000 workers due to the shortage of chips, with production and relocation patterns affected at plants in Germany and Mexico. Production of the luxury brand’s A4 sedan and A5 convertible has been suspended for the time being until January 29 in Neckarsulm, Germany.
“We are currently looking at a range of countermeasures and alternatives designed to reduce the impact of the supply bottleneck and in turn reduce the number of vehicles affected,” a spokesman said. “Any improvement depends largely on the semiconductor industry.”
Fiat Chrysler said last week that it would begin slowing production after an outage at its Toluca, Mexico, factory building the Jeep Compass. It also planned downtime at its Canadian plant in Ontario, which manufactures the Chrysler 300, Dodge Charger and Dodge Challenger.
Japanese carmakers are hurting too. Toyota said on January 12 they were forced to temporarily halt production at a plant in Guangzhou, China, and to halt production at a Tundra pickup plant in Texas. Nissan and Honda have both said they are adjusting production due to the shortage.
South Korea’s Hyundai said in a statement on Monday that it was “making efforts to optimize the supply of spare parts to ensure stable production at every production center.”
Chinese factories may be worst affected
According to IHS, production levels in Europe, North America, Japan and India are expected to be achieved this quarter. But the biggest problem may be in China.
“At this stage, the largest volume of disruption is being noticed in mainland China, with varying levels of visibility in the supply chain, where the risk based on available information in the first quarter could be 250,000 units,” Fulthorpe said.
Taiwan Semiconductor Manufacturing Company (TSMC), a major supplier of chips, said last week that the shortage is the highest priority. “We are working closely with our automotive customers to resolve capacity support issues,” CC Wei, chief executive, told an investor conference on Thursday.
Jake Kwon, Junko Ogura, Jill Disis and CNN’s Beijing bureau contributed to this article.