Officials at Volkswagen, Ford, Fiat Chrysler, Toyota and Nissan all say they have been hit by the shortage and have been forced to delay production of some models in order to keep other factories running.
A widening global shortage of semiconductors for auto parts is forcing major auto companies to halt or slow vehicle production just as they were recovering from pandemic-related factory shutdowns.
“This is absolutely an industry issue,” Toyota spokesman Scott Vazin said in an email. “We are evaluating the supply constraint of semiconductors and developing countermeasures to minimize the impact to production.”
Industry officials say semiconductor companies diverted production to consumer electronics during the worst of the COVID-19 slowdown in auto sales last spring. Global automakers were forced to close plants to prevent the spread of the virus. When automakers recovered, there weren’t enough chips.
The shortage in chips required in increasingly automated cars is the latest example of how the semiconductor industry’s ebbs and flows can have ripple effects in products.
Source: AP via Auto.com from the India Times Read the Article
PSR Analysis: The world’s largest carmakers face a potentially crippling shortage of semiconductors as chipmakers reserve supplies for tech groups producing smartphones, tablets, and gaming devices. India is no exception. Even Indian OEMs have started facing the heat of the global semiconductor shortage.
Bosch, a key supplier to most Indian automakers, said the steep escalation of demand in the consumer electronics industry driven by safety and hygiene sentiments, coupled with the rise of 5G connectivity, has led to a surge in global demand for semiconductors.
The situation is so acute that Ford India, which uses the Chennai base to export cars, has been compelled to shut the plant for a week. Mahindra & Mahindra are expecting this shortage to hit their car, truck, and tractor business for the entire quarter. Maruti Suzuki has revised its tentative production plan from 5.5 lakh units estimated in November to 4.97 lakh units in January.
We anticipate the shortage of semiconductors will exist for the coming 4-5 months. Though it will hamper monthly production, it will have only a moderate impact on the year’s production.
To tackle this issue, automakers might divert the chips to top-selling segments of the market, including pickup trucks and SUVs, which will further impact the segments’ product mix. But If the chip shortage lasts, production cuts could reduce the inventory of vehicles for sale in the country and other markets. That comes when the industry shifted to BSVI and started to replenish inventory lost when factories shut down last spring to stop the spread of novel coronavirus. PSR
Aditya Kondejkar is a Research Analyst – South Asia Operations for Power Systems Research
