Spare parts shortages are hurting the car industry, which is still struggling to return from last year’s production shutdown – and the situation is getting worse as the problem spreads from microchips to seat foam and plastic.
The biggest problem was a shortage of chips used to drive everything from drives to digital security systems. This has led to the closure or reduction in production by many of the largest manufacturers in the industry over the past few weeks, including General Motors, Honda, Nissan, Volkswagen, Ford, Toyota and Stellantis.
“We are continuing to address a number of issues regarding the supply chain related to the impact of Covid-19, congestion in various ports, the shortage of microchips and the severe winter weather,” Honda said in a statement. somehow said: car plants in the US and Canada will be affected, and most of the plants will temporarily suspend production during the week of March 22nd. ‘
The shortage led Ford to reduce a shift at its Kentucky Truck Plant, which manufactures its Super Duty pickups, the Ford Expedition and the Lincoln Navigator, until next week. Another Kentucky assembly plant in Louisville is expected to reopen Tuesday after it closed last week due to a shortage of chips. Nissan has reduced or canceled the production of several models, including the Murano and Rogue SUVs, the Leaf crossover and the Maxima sedan. Toyota has adorned the production of popular models in the US and Mexico, including the Camry sedan and the RAV4 SUV.
Volvo, which affected the South Carolina plant that makes the S60 sedan, said in a statement on Monday that the shortage of chips would have a significant impact on the Volvo Group’s production in the second quarter. “Volvo has said it will implement ‘stop days’ of two to four weeks and that the confusion is expected to have a negative impact on earnings and cash flow.
General Motors has been facing stop-and-go production problems for the past few weeks when its own microchip stock was short. It tried to circumvent the problem in one factory by redesigning an engine control module for its Chevrolet Silverado and GMC Sierra pickups. While the vehicles still meet federal emissions standards, the solution reduces their fuel consumption by about a mile per gallon, GM confirmed.
Today’s cars can use 100 or more microprocessors, making the industry particularly vulnerable to supply disruptions. The crisis was caused last year by the declining production of pandemics, when chipmakers had a strong demand from consumer electronics companies that had a strong demand for electronics from TVs to smartphones to webcams during the Covid-19 closures.
Chipmakers say they do not have the ability to increase production quickly in the automotive industry as car sales recover. President Joe Biden last month called for $ 37 billion in new funding “to work with industry leaders to identify solutions to the semiconductor shortage.” He also signed an executive order requesting that the supply chains be reviewed for 100 days. It is unclear how quickly any of the measures can increase production and refill the order pipeline.
In addition to the crisis, some manufacturers are running out of critical petroleum-based products after the recent icy weather in Texas led to the closure of major petrochemical plants. Industry analysts expect shortages of petroleum-based plastics and motor oil products, especially seat foam.
This is a very difficult time for the automotive industry. North American production was halted about two months ago last spring due to the pandemic. Since they reopened, carmakers have struggled to refill showrooms. According to research firm JD Power, stocktaking at U.S. dealer parties with at least a million vehicles is lower than would normally be this time of year.
Consumers are feeling the pinch in several ways, analysts say. Buyers may find it harder to find the exact models they want, especially in terms of color and accessories. With a short supply, carmakers have cut incentives, while sellers need less to reduce transactions.
The idle production and the reduction of sales have a great influence on the joint core. Ford warned that the scarcity alone could reduce earnings by $ 1 billion to $ 2.5 billion. General Motors puts its number at $ 2 billion. While Honda did not release a dollar figure, it warned last month that it would sell about 100,000 fewer vehicles worldwide this year, simply because of the shortage of chips.