NorthAm auto cutbacks deepen on semiconductor shortage

Production cuts are deepening for North American automakers as shortages of semiconductors and other parts continue to impact production.

North American automakers are expected to lose out on the production of 230,000 vehicles in 2021 because of a lack of semiconductors and other raw materials including petrochemicals, according to the latest report from AutoForecast Solutions. Prior to the recent supply shortage, 15.75mn vehicles were estimated on track to be assembled in the US, Mexico and Canada in 2021.

The latest estimate of lost production is 37pc deeper than the prior week, when AutoForecast Solutions estimated that 168,000 vehicles would not be built because of the shortfalls.

Globally, including North America, AutoForecast estimates production of 400,000 vehicles is unrecoverable in light of the supply issues.

The lost production may be felt the most in the US, where high demand for new vehicles has sent new vehicle inventory levels to their lowest since October 2020, according to Cox Automotive.

New vehicle inventories in March totaled 2.66mn vehicles, a decline of 6pc compared to February. Days of supply in March were 59 days compared to 78 days in February, making March the lowest in supply/days since October 2020 and 41pc lower than in March 2020.

A lack of semiconductors has shuttered many North American auto plants, as high demand from consumer electronics and auto plant shutdowns in 2020 have eaten into supply for the microchips that are vital for the production of automobiles.

Multiple automakers across the continent currently have production closed down, including Ford Motor, which is taking outages at two of its plants that produce its top selling, steel- and aluminum-intensive, F-150 full-size pickup truck.

General Motors has taken multiple outages at plants across North America, although this week it announced the rollback of two outages it was planning to undertake the week of 19 April, citing improved semiconductor supply conditions.

By Rye Druzin