A Ford spokesman said: “We are monitoring the situation closely and adjusting production schedules to minimize the impact on our employees, suppliers, customers and dealerships throughout Europe.” “At the moment, we do not expect any similar measures at our other European facilities.”
Leading semiconductor manufacturers reassigned capacity from car makers last year after the pandemic led to a drop in car sales, and instead shipped chips to companies that produce smartphones, game systems, and other tech gadgets that remained in great demand. Supplies remain scarce, and carmakers are struggling to secure the chips they need.
“Light vehicle manufacturers are finding increasing disruptions to the supply of semiconductor systems in the first quarter,” Mark Foolthorpe, executive director of the automotive team at IHS Markit, said recently in a research note. “The situation is very volatile.”
The turmoil comes at a critical time for carmakers, which suffered from a sales collapse in the early months of the pandemic, but are still under intense pressure from global regulators to invest heavily in electric cars. Research firm Bernstein estimates global auto sales will grow 9% in 2021, after an expected 15% drop last year – but a chip shortage is putting the recovery at risk.
According to UBS analysts, the world’s largest automaker could lose 100,000 units of production in the first three months of the year, or nearly 4% of global quarterly production, as a result of component shortages.
“We are doing our best to reduce lost production and to ensure that regular deliveries to customers resume as quickly as possible,” said Murat Axel, Volkswagen Group’s purchasing manager, in a statement last month.
Audi said Monday it has shut down 10,000 workers due to a chip shortage, with production patterns and plant shifts affected in Germany and Mexico. Production of the A4 sedan and A5 Cabriolet is paused in Neckarsulm, Germany, until January 29.
A company spokesperson said: “We are currently looking at a set of countermeasures and alternatives designed to mitigate the impact of the supply crisis, and thus reduce the number of damaged vehicles.” “Any improvement depends to a large extent on the semiconductor industry.”
Fiat Chrysler said last week it would delay the resumption of production after a scheduled outage at the Toluca, Mexico plant building the Jeep Compass. It has also scheduled stops at its Canadian plant in Ontario, which produces the Chrysler 300, Dodge Charger and Dodge Challenger.
Japanese carmakers are also hurting. Toyota said it was forced to temporarily halt production at a plant in Guangzhou, China, on January 12, and that it would cut production at the Texas plant that produces Tundra pickups. Both Nissan and Honda said they were “adjusting” production in response to the shortfall.
South Korea’s Hyundai said in a statement on Monday that it is “making efforts to improve parts supply to ensure stable production at every production center.”
Chinese factories may be the hardest hit
Output levels in Europe, North America, Japan and India are expected to be affected this quarter, according to IHS. But the biggest problem may be in China.
“At this point, with varying levels of visibility across the supply chain, the largest volume disruption has been observed in mainland China where, based on available information, the risk could be 250,000 units in the first quarter,” said Fultthorpe.
Taiwan Semiconductor Manufacturing Corporation (TSMC), a major supplier of chips, said last week that mitigating the shortage was its “top priority”. “We are working closely with our automotive customers to solve capacity support issues,” CEO CC Wei said at an investor conference Thursday.
Jake Kwon, Junko Ojura, Jill Decis, and the CNN Beijing office contributed to this article.