Global motor industry cuts production as chip shortage continues

The global semiconductor shortage could mean that nearly 700 000 light motor vehicles, across the world, will not get made in the first quarter of 2021.

At present, 672 00 units of light vehicle production are affected, impacted manufacturers include Ford, Toyota, Fiat Chrysler, who all had to slash their output due to the shortage of auto chips, according to Reuters.

Volkswagen, meanwhile, said the supply constraints would impact manufacturing at some of its plants in February. Data firm IHS Markit warned that the shortage could extend into the third quarter of the year.

“Because the cause of these constraints is the result of increasing demand from OEMs and limited supply of semiconductors, it will not be resolved until both forces are aligned,” said Phil Amsrud, a senior analyst at IHS Markit that looks into semiconductors and components.

China will be the nation that is hardest-hit by the shortage, according to IHS, as nearly 250 000 units will be affected in the first quarter.

On Tuesday, February 2, AutoForecast Solutions, a firm that examines motor industry production plans, predicted that 964 000 vehicles will be hampered by the semiconductor shortage in 2021.

On Wednesday, February 3, American car manufacturing giant, General Motors announced it would completely shut down production at four of its assembly plants during the week of February 8 because of the shortage.

It also intends to run two more of its plants at half capacity during the same week. “Despite our mitigation efforts, the semiconductor shortage will impact GM production in 2021,” said GM spokesperson, David Barnas, in a statement.

Mazda is considering cutting its global output by 34 000 vehicles in February and March due to the shortage, according to Reuters.

The models affected by the reduction are the CX-5 and CX-30 SUVs and the Mazda 3 sedan, as the chips used in the braking systems and safety components are in short supply.

Mazda plans to reduce its domestic output of the CX-5 by 3900 units in February and it is considering reducing the production of the SUV by approximately 6000 units in March.

The manufacturer is also considering cutting the output of the Mazda 3 and CX-30 in Japan, China and Mexico. “We are expecting a (global) impact on our output in February,” said Mazda spokesperson. “We continue to do our best to minimise the impact.”

The spokesperson added the manufacturer will slow down its production but it is not planning on bring production lines at its plants to a complete stop.

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