{"id":207298,"date":"2021-08-17T15:41:41","date_gmt":"2021-08-17T19:41:41","guid":{"rendered":"https:\/\/www.thedetroitbureau.com\/?p=207298"},"modified":"2021-08-17T15:41:43","modified_gmt":"2021-08-17T19:41:43","slug":"production-losses-due-to-chip-shortage-climbing-may-hit-7-1m-worldwide","status":"publish","type":"post","link":"https:\/\/thedetroitbureau.com\/2021\/08\/production-losses-due-to-chip-shortage-climbing-may-hit-7-1m-worldwide\/","title":{"rendered":"Production Losses Due to Chip Shortage Climbing, May Hit 7.1M Worldwide"},"content":{"rendered":"\n

Week after week, the number of auto plant closures due to the global semiconductor shortage never seems to abate. The industry lost 107,000 vehicles last week alone. Ford, GM, Stellantis, Nissan, Honda, Mercedes-Benz \u2014 no company is immune.\u00a0<\/p>\n\n\n\n

\"Stellantis
Stellantis shut down its Windsor plant earlier this year due to the semiconductor shortage.<\/figcaption><\/figure><\/div>\n\n\n\n

A new report from AutoForecast Solutions says the number of vehicles lost \u2014 not produced \u2014 will hit 7.1 million before it\u2019s all said and done. The firm estimated with the recent 107K in losses \u2014 71,300 in North America \u2014 the global industry has lost 5.96 million vehicles thus far.<\/p>\n\n\n\n

The latest estimates in North America include Nissan losing 8,000 Rogue crossovers at its Tennessee plant<\/a><\/u><\/strong>, 6,700 Altima sedans in Mississippi and another 6,800 Sentras produced in Mexico. GM\u2019s cuts account for 7,600 Chevrolet Equinox crossovers as well as another 6,400 Chevrolet Blazers lost. <\/p>\n\n\n\n

Of the 5.96 million vehicles lost thus far, most are from North America at 1.95 million. However, Europe and China aren\u2019t far behind at 1.76 million and 1.22 million, respectively. AFS expects the final tallies to come in at 2.25 million in North America, 2.22 million in Europe and 1.28 million in China.<\/p>\n\n\n\n

\"Daimler
Daimler CEO Ola K\u00e4llenius said he expects the company will be dealing with the semiconductor issue in 2022.<\/figcaption><\/figure><\/div>\n\n\n\n

A few months ago, AlixPartners predicted the global impact<\/a><\/u><\/strong> of the shortage will cost automakers $110 billion, which doubled earlier predictions. Those numbers may yet rise again as chip makers in Asia struggle to ramp up production while dealing with everything from plant fires to new COVID-19 outbreaks.<\/p>\n\n\n\n

The chips are coming \u2026 eventually<\/h2>\n\n\n\n

Most auto executives believed the second quarter would be the worst in terms of the dearth of chips, many pointing out that it will still take a while for things to get back to normal. Daimler CEO Ola K\u00e4llenius recently told analysts he didn\u2019t believe chip supplies<\/a><\/u><\/strong> would return to normal until 2022.<\/p>\n\n\n\n

\u201cThe technology content in cars is rising. So even if the production volume of cars would stay the same, you have more content in the cars. So in the midterm, even though I realize that probably in 2022, we\u2019re going to talk about this as well,\u201d K\u00e4llenius said. <\/p>\n\n\n\n

\"Renesas
Japanese chip supplier Renesas suffered a fire at its Naka factory, only adding to the woes of automakers awaiting more chips.<\/figcaption><\/figure><\/div>\n\n\n\n

\u201cSo you have to bear with us here, with a level of uncertainty that we have to live with,\u201d he added. \u201cImproving the supply stability, needless to say, is a top priority for us.\u201d<\/p>\n\n\n\n

Production levels are on the rise. Taiwan Semiconductor Manufacturing Co. CEO C.C. Wei, said in April he believes the shortage for his company\u2019s automotive customers, which are chipmakers such as NXP and Texas Instruments, will begin to ease in the third quarter. <\/p>\n\n\n\n

Why is it taking so long?<\/h2>\n\n\n\n

Ford CEO Jim Farley noted some of the chip makers have dealt with issues beyond shifting all the available production to electronics companies, such as Japan\u2019s Renesas, which had a fire in March. Even though the plant\u2019s production facility was rebuilt rather quickly, it still takes time get everything back online and then into full production.<\/p>\n\n\n\n

Plus the companies, such as the aforementioned Taiwan Semiconductor or TSMC, need to get wafers to companies like Renesas, which also takes time.<\/p>\n\n\n\n

\"2021
Ford’s lost nearly a $1 billion in EBIT due to F-Series production lost to the chip shortage.<\/figcaption><\/figure><\/div>\n\n\n\n

In fact, the chain takes about 26 weeks, according to Ford, which means that the extra supply TSMC said is coming in the third quarter probably will not reach automaker assembly plants until late 2021 or the first quarter of 2022.<\/p>\n\n\n\n

Ford has endured the biggest hit in terms of lost units with 324,616 through May 18. Ford\u2019s F-Series has the most vehicles lost of any single vehicle produced in North America at 109,710 units. According to LMC Automotive, Ford\u2019s capacity utilization through May is just 55% because of the downtime it\u2019s been forced to take due to the shortage.<\/p>\n\n\n\n

Losing that many vehicles, especially F-Series pickups, is massive strain on the automaker\u2019s finances. The company reported a surprise profit of $561 million<\/a><\/u><\/strong> during the second quarter. Most were predicting the automaker would report a loss.<\/p>\n\n\n\n

\u201cFor perspective, every 100,000 units of lost F-Series production costs Ford about $4.7 billion of revenue,\u201d wrote Morningstar\u2019s David Whiston in an Aug. 13 report. \u201cGiven what we assume is an EBIT margin in the high teens to 20%, we calculate lost EBIT of about $937 million for every 100,000 lost U.S. F-Series wholesale units.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

Week after week, the number of auto plant closures due to the global semiconductor shortage never seems to abate. Ford, GM, Nissan, Honda, Mercedes-Benz \u2014 no company is immune. A new report from AutoForecast Solutions says the number of vehicles lost \u2014 not produced \u2014 will hit 7.1 million before it\u2019s all said and done. Check out the story at TheDetroitBureau.com.<\/p>\n","protected":false},"author":4389,"featured_media":155426,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","footnotes":""},"categories":[7,8,5,9],"tags":[2207,2206,2205,562,2208,428],"make":[],"post-state":[335],"category_old":[],"acf":[],"_links":{"self":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts\/207298"}],"collection":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/users\/4389"}],"replies":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/comments?post=207298"}],"version-history":[{"count":4,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts\/207298\/revisions"}],"predecessor-version":[{"id":207303,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts\/207298\/revisions\/207303"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/media\/155426"}],"wp:attachment":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/media?parent=207298"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/categories?post=207298"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/tags?post=207298"},{"taxonomy":"make","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/make?post=207298"},{"taxonomy":"post-state","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/post-state?post=207298"},{"taxonomy":"category_old","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/category_old?post=207298"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}