Chip shortage forces some global carmakers to reassess output

A semiconductor shortage is dragging on some of the world’s biggest vehicle manufacturers, costing Daimler, Nissan Motor  and Honda Motor  production of a range of cars.

Mercedes-Benz maker Daimler joined its German peer Volkswagen in announcing it’s affected by the industrywide supply bottleneck, without quantifying the affect. Honda said it will cut domestic output by about 4,000 cars in January at one of its factories in Japan, while Nissan is adjusting production of Note hatchbacks in January.

VW, the world’s biggest carmaker, announced in December that it would need to adjust first-quarter manufacturing plans about the globe because of the shortage. The company said chipmakers reassigned some of their production capacity to consumer electronics and other sectors in 2020 and were caught off guard by surprisingly resilient vehicle demand. The amount of VW car output lost could be in the low six-digit range, according to people familiar with the matter.

The supply-chain issue could keep the motor industry from getting off to a smooth start to the year after the coronavirus undercut output during much of 2020. Struggles to rebuild inventory in some markets led the largest US car dealer and lender to complain the industry has been missing opportunities for more sales.

Japan affect

Honda’s Japanese peer Suzuki Motor also is altering production, though there’s no plan at this point to idle factories, a spokesperson said. A Subaru representative said it’s been dealing with some parts-supply delays and may adjust output.

“The spread of the coronavirus has affected procurement in semiconductors and related parts,” a Honda spokesperson said in a statement on Friday. “We will address this issue by adjusting production and replacing car models.”

Honda will trim production at its Suzuka plant, located in Japan’s eastern Mie prefecture. The plant makes the Fit subcompact, which is also marketed as the Jazz. The chip shortage could potentially affect tens of thousands of vehicles in the March quarter, Nikkei reported, citing an unidentified source.

Nissan’s Oppama plant in Japan will reduce Note production this month, a spokesperson said, without giving details. The Nikkei said the company would cut output to 5,000 cars a month, from 15,000.

German suppliers

Robert Bosch and Continental, Europe’s largest car-parts makers, acknowledged the chip-shortage issue in December after VW’s announcement.

BMW said the carmaker is in regular contact with its suppliers over the issue, though it hasn’t yet had to reduce or stop car production.

Peugeot maker PSA  has not been affected, a spokesperson said on Friday.

Bloomberg