NorthAm auto production cuts continue

The North American automotive industry will cut more production as semiconductor issues continue to curtail operations.

The added cuts come as estimates for the amount of lost production continues to rise. This week AutoForecast Solutions raised its estimate of unrecoverable vehicles in 2021 to 1.1mn, with 353,000 vehicles at risk and 325,000 vehicles recoverable. The company now estimates that 15.25mn vehicles will be built in 2021, down by 500,000 from an April estimate.

General Motors (GM) is adding an additional week of closures during the week of 2 August to its Lansing Delta Township crossover plant in Michigan, its Ramos, Mexico small SUV plant, and its Spring Hill, Tennessee sedan plant. The three plants have been closed since 19 July.

GM will also extend the closure of its San Luis Potosi, Mexico small SUV plant for three weeks, through 22 August. That plant has also been down since 19 July.

The Fairfax sedan plant, which is currently idled, will continue to be closed for an additional four weeks through 19 September. Production of the Cadillac XT4 will resume on 20 September, with Chevrolet Malibu production remaining idle.

GM will restart full-size truck production at its Flint, Michigan, Ft Wayne, Indiana, and Silao plant in Mexico on 2 August.

Ford's chief executive Jim Farley expects the semiconductor shortage to ease in the third quarter but warned that there could be further headwinds, especially with Renesas Electronics, one of Ford's semiconductor chip suppliers.

A fire on 17 April took out a wafer line at Renesas Electronics' Hitachinaka plant that fed into the auto industry. The line was said to have resumed full production on 24 June.

Ford's North American sales increased by 20pc year over year to 327,000 vehicles, but declined by 39pc in the second quarter compared to the first, when the company sold 533,000 vehicles. Ford attributed the lower sales compared to the first quarter to a lack of vehicles because of the semiconductor shortages.

Chief financial officer John Lawler said the chip shortages are expected to last through the rest of 2021, and possibly into 2022.

By Rye Druzin