Semiconductor supply hits NorthAm auto output

A global shortage of semiconductors is hitting the North American automotive industry as it claws back from early 2020 production shutdowns.

The global shortage of semiconductors was first reported in December with some automakers in North America confirming that they are scaling back production of low-volume vehicles to focus resources on higher demand items like trucks and sports utility vehicles (SUVs).

The supply chain crunch is the latest issue for the auto industry, which has struggled since mid-2020 to produce enough vehicles to restock inventories after taking production offline for more than two months between mid-March and at least mid-May because of the Covid-19 pandemic.

The new vehicle count stood at 2.87mn vehicles in the first week of December, down from 3.56mn vehicles in the same period of 2019, according to automotive research group Cox Automotive. Days supply of new vehicles is estimated at 75 days supply, down from 88 days supply from the previous year.

The global shortage has led Fiat-Chrysler Automobiles to delay the restart of its auto plant in Toluca, Mexico, that assembles the Jeep Compass, the company said. The shortage is also forcing FCA to temporarily shut down its plant in Brampton, Ontario, that assembles the Chrysler 300, Dodge Charger and Dodge Challenger sedans.

Honda expects to "[experience] production issues over the next few weeks" because of a lack of semiconductors.

Toyota's supply issues are primarily impacting production of the company's Tundra full-size pickup truck in San Antonio, Texas. Components for the truck are produced in Alabama, Missouri, and Tennessee.

Subaru is considering production adjustments because of supply issues, while General Motors (GM) currently is not being impacted by the lack of semiconductors but is working to ensure a steady supply to mitigate any issues.

It is unclear how long the lack of semiconductors will impact the industry, and what it will mean for auto production in 2021, which was expected to grow compared to 2019 after being stunted by the coronavirus-related shutdowns in 2020.

By Rye Druzin