By on May 24, 2021

The semiconductor shortage marches onward with no real end in sight. Supply chains remain a tangled mess following a year of pandemic-related restrictions and demand remains ridiculously high as we unnecessarily network and digitize increasingly more consumer goods (e.g. toothbrushes).

Though this website is really only concerned with the pace of automotive factories — most of which seem operating at the industrial equivalent of driving on the shoulder with the hazards on. The global number of vehicles lost in announced shutdowns and line slowdowns as a result of chip shortages is swiftly closing in on 3 million and estimates have it continuing on unabated for the rest of 2021. 

Automotive News has kept weekly tabs on the domestic side of the equation, with plenty of help from AutoForecast Solutions, noting that the last seven-day period was particularly rough on Ford and Stellantis. North American facilities came up 151,000 vehicles short of their normal production schedules over the last week, with the outlet updating its own projections. Analysts are now estimating the automotive sector could come up 4 million units shy of where it would have liked to be before the chip shortage took hold.

From AN:

Among the 93,000 Ford vehicles taken out of North American production schedules last week were 28,000 Escape compact crossovers (Louisville, Ky.); 35,000 F-Series pickups (Dearborn, Mich., and Kansas City, Mo.); 7,000 Edge midsize crossovers (Oakville, Ontario); and 6,500 Explorer crossovers (Chicago).

Stellantis took nearly 38,000 vehicles out of its North American production schedules, including 36,000 Jeep Cherokee SUVs (Belvidere, Ill.) and 1,100 Chrysler Voyager minivans and 900 Chrysler Pacifica minivans (Windsor, Ontario).

With everything from toasters to televisions being hit by the semiconductor shortage, there’s seemingly no limit to how bad things can get. But it’s the automotive industry that’s unquestionably taking the most severe beating. We doubt it will be long before industry giants begin requesting financial assistance from local governments.

In the interim, manufacturers are reducing the amount of technology that’s been going into vehicles. Ram has cut the fancy, intelligent rear-view mirror from the 1500 pickup and Nissan has made navigational systems optional equipment on some vehicles that previously included it. But these are just a couple of examples from an industry that’s cutting corners the world over to help mitigate the crisis.

Meanwhile, tensions in Asia continue to swell. China has repeatedly signaled that it will eventually invade Taiwan — an island that just so happens to be ground zero for semiconductor production — using the pretense that it’s not actually a sovereign nation. The Chinese Communist Party sees its decades of independence as a matter of secession, claiming nothing can block the alleged “reunification” of the two countries. Blockades have also been hinted at, which would have similarly dire consequences for chip supply channels.

[Image: General Motors]

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46 Comments on “Report: Semiconductor Chip Shortage Could Affect 4 Million Vehicles...”


  • avatar
    Astigmatism

    Well, sure, but China’s claims to Taiwan are older than virtually anyone reading this website. The chip shortage is real, an imminent shooting war in the South China Sea is not.

    We were planning on trading in my wife’s CX-5 this summer for an electric, and my father-in-law was planning on finally ditching his ancient Lexus for a modern CUV. Fortunately, both the CX-5 and the Lexus are still running, and I’m guessing will be running with us for another six months at least while we wait out the shortage.

    • 0 avatar
      slavuta

      China just can build more of those islands around Taiwan and it will look like Taiwan is part of the continent.

      On a positive note, may be manufacturers will return to some level of analog stuff?

    • 0 avatar
      johnds

      I can’t believe the surprise in some that their newer vehicle can last more than 5 years, I know some who are fortunate to say my car has lasted me 20-30 years. As far as waiting for an EV, reports are coming out left and right that an EV is no cleaner than buying a Hybrid Rav 4 for example. Your purchase of an EV is actually causing severe damage to the environment in developing countries where the mining of materials for battery occur.

      • 0 avatar
        Astigmatism

        A Rav4 hybrid gets about 40 mpg combined. Based on the electric generation mix where I live, a Tesla Model 3 Long Range has roughly equivalent emissions to a passenger car getting 138 mpg. Producing an electric generates more emissions than producing a hybrid, but not nearly that much more.

  • avatar

    Consider the positive side of the shortage – less CO2 in atmosphere!

  • avatar
    puddleJumper

    On the plus side, fewer of those gawd-awful Chevy and GMC pickups on the road!

    • 0 avatar
      redapple

      PUDDLE>>>>

      Agreed !
      Ugly crap should be called out at every chance.

      REAL NASTY SKANK OF A PIG UP TRUCK!!

      BIG 3. Please make them BIGGER.!!!!!

    • 0 avatar
      dantes_inferno

      >On the plus side, fewer of those gawd-awful Chevy and GMC pickups on the road!

      And fewer tractor trailer available to deliver goods and services. Which lead to higher prices for goods and services.
      I hope you’re comfortable opening your wallet on more than a regular basis.

  • avatar
    jimmy2x

    I’d like to trade in my 2010 ES for a new car, but I’ll be damned if I’m going to pay list price for ANY car. Hopefully, things will get back to normal next year.

    • 0 avatar
      28-Cars-Later

      They won’t, but if you do the average valuation on an MY10 ES350 is $8,275 with avg miles of 127K. Don’t accept a penny less, I got word new dealers here are extremely lowballing trades at like ***30%*** of true value. Motherf**kers.

      • 0 avatar
        Kendahl

        I suspect the same dealers are charging premium prices for the used cars they keep on their lots. It’s a sellers’ market. Therefore, if you can keep your current vehicle running for another year (or however long it takes), don’t be a buyer.

        For what it’s worth, I’ve read that Tesla has an assured supply of semiconductors so the shortage shouldn’t affect them. Elon may or may not jack up prices simply because the market will bear them.

        I don’t know about other markets but, here in Arizona, prices are skyrocketing in the real estate market, too. A bad time to be a first time buyer.

        • 0 avatar
          28-Cars-Later

          “I’ve read that Tesla has an assured supply of semiconductors so the shortage shouldn’t affect them.”

          A Festivus miracle!

          I was just in Phoenix at a real estate conference, I completely understand your situation. Agents told me everything is above ask and I couldn’t find one who would write an offer under on a failed flip in north Phoenix. I can also tell you two small time dealers at the conference told me they have stopped selling their cars and put them on Turo because its more profitable during the rental car shortage out there.

      • 0 avatar
        David

        Vroom, CarMax, and Carvana all do online offers. Just take one (or more) of those into the dealer when you negotiate a trade-in. My 2020 RAV4 Hybrid Limited with 8,700 miles on it has an offer of almost $34k… Remarkable given that I paid $37k for it in November 2019 brand new.

  • avatar
    28-Cars-Later

    “Analysts are now estimating the automotive sector could come up 4 million units shy of where it would have liked to be before the chip shortage took hold.”

    Next year it will be 5-6 million units. You “voted” for it Amerika.

    • 0 avatar
      Astigmatism

      For clarity, whom did America vote for that caused a global microchip shortage due primarily to economies worldwide shutting down and international borders being closed during a pandemic?

      • 0 avatar
        28-Cars-Later

        I received reliable information from Detroit this will go on for the next three years. I don’t believe for a second it is not being intentionally exacerbated in order to advance the Red New Deal be it overseas, at the ports or things falling off trucks (another thought is slowly curtail oil usage because of Peak Oil).

      • 0 avatar
        golden2husky

        ..For clarity, whom did America vote for that caused a global microchip shortage due primarily to economies worldwide shutting down and international borders being closed during a pandemic?…

        Amazing, isn’t it? Carmakers cut purchases due to expected slump in demand during the pandemic. Other industries snap up the excess semiconductors, car sales then start to rise and the carmakers can’t get what they need. That’s not Biden’s fault, or Trump’s fault. Same is happening in a whole host of industries. Yet here comes the drivel…”see what happens when a socialist is in office”…ugh.

        • 0 avatar
          28-Cars-Later

          I don’t believe for an instant that these situations are not being exacerbated. I received reliable information that it was expected to last three years. Three. Fricking. Years. How long does it really take to switch gears in Asia since heaven forbid we manufacture anything in the US? A few months at most. But yes, folks in MI were talking three years. But sure, that’s not deliberate at all.

    • 0 avatar
      Kendahl

      Semiconductor design and manufacturing is a strategic industry in which the United States used to be the world’s leader. Due to decades of neglect here and honest hard work by foreigners like Taiwan, that’s no longer the case. Taiwan’s products aren’t just cheaper. They’re better. American semiconductor factories aren’t able to produce chips as advanced as those coming from Taiwan factories. This can be fixed but it will take time and money that I don’t see the United States government nor American industry willing to invest.

      Of course, China wants Taiwan. Compared to most of the mainland, it’s a prosperous, advanced society. The western world, China’s rivals, depends on Taiwan’s high tech exports. There’s an insurance company that brags you’re in good hands with them. I’ve always thought those hands were wrapped snugly around their clients’ testicles. China in control of Taiwan’s semiconductor industry would be similar.

  • avatar
    JMII

    Hopefully this shortage doesn’t effect Hyundai cranking out the new Santa Cruz UTE because I like to purchase by the fall. However I’ve waited 20 years to replace my Dodge Dakota so I guess I can wait a little longer.

    • 0 avatar
      28-Cars-Later

      Hopefully you’re right but it probably will. I would anticipate Hyundai will still release it but it will likely be in more limited quantities with healthy ADM.

  • avatar
    Jeff S

    With this shortage this will get many in the habit of paying MSRP for new vehicles. This would be more profitable for dealers. If this becomes a permanent practice I would rather buy directly from the manufacturer and then order the vehicle with the color and features I want. If I am going to pay MSRP or above then I don’t want to just take any vehicle. Since I don’t need a new vehicle or even used vehicle for a number of years I can wait.

  • avatar
    DenverMike

    At least GM’s robotics are impressive. Amazing what they can accomplish, just to put more Americans out of work!

    They don’t even have to go to China and Mexico.

  • avatar
    Lou_BC

    Is this really a bad thing? I had read years ago that many in the auto industry felt that global production was 20% above what it should be. That was one of the reasons the late Sergio Marchionne wanted to merge companies.

    • 0 avatar
      28-Cars-Later

      Yes it is, if you’re into a reasonable vehicle payment and remarketing valuation. In 2019 BP (before plandemic), in the wholesale world we were already reeling from the lack of production 2008-2012 with growing demand for used examples because of the socioeconomic situation created after 2008. On average in the 2008-12 period we probably saw 60% of total production of what would have happened if 2007 and earlier levels were sustained. By late 2012, these figures rose beyond 12 million units and IIRC eventually got back to 16m units per year after 2013 to about 2019. Now 2020 experienced probably an equal or greater lack of production than 2008, and it seems there will be another multi year lean period. Assuming Earth like conditions return, ever, you’re talking about another huge used car shortfall hitting by the late 2020s.

      The past fourteen months I have personally witnessed bat sh!t crazy things in wholesale, from the entire market dropping 11% on average swinging back above the March figures in 60 days to the car I bought new being worth more used than I paid for it in 2018. At this rate, next up will be used cars sold as “near new” for a 10% haircut and/or somehow being paid to buy a new car.

      I believe Sergio was promoting mergers because he read the tea leaves and saw the inbred psychopaths behind the uniparty politicians were demanding EV and it would decimate the auto industry. So in order to survive, FCA needed to merge with a player who on their own or together could make it through the coming car-pocalypse.

      They’ve already alluded to the end game: you will own nothing and be happy. The junta in Washington D.C. is 100% on board with this, either the previous lawful administration was not or could not be trusted to implement these changes so it had to go. Now every major gov’t is united in the goals to lower Western living standards among other things. Overseas things like home ownership and private vehicle ownership it is only the top 20% of society who generally own such assets, whereas in the US these are attainable to the “middle class”. They will be correcting this as it is believed in their perception to be an “error”.

      • 0 avatar
        Lou_BC

        “the previous lawful administration was not or could not be trusted”

        You got that part right but the latter…um…no….They were incompetent and lost in a free and fair election.

        The current lawfully elected administration is doing what they said they’d do during the election campaign. They aren’t responsible for this. Sourcing the cheapest product regardless of country of origin is the main
        problem.

        • 0 avatar
          golden2husky

          61 Court cases, 61 thrown out for lack of evidence. Even Barr said “no fraud existed on the scale that would have had any effect on the outcome”. Yet the Big Lie continues. So, if you say it loud enough, long enough, and hard enough, the lies stick…

          • 0 avatar
            zach

            The goalposts keep changing, and silly me, I thought a courtroom was where evidence was presented.

        • 0 avatar
          28-Cars-Later

          @Lou

          You’re my boy so I’m not going to argue, but introducing mail ballots 100% introduced a level of fraud into the equation not previously present. In a tight election, that say 1% of fraud could have swayed certain districts. I have to hand it to them though, mail fraud was a brilliant idea and they could never have acted on it without the virus. Last year featured some of the most convenient events of the 21st century.

          “Even Barr said “no fraud existed on the scale that would have had any effect on the outcome””

          LOL Ok so sure there was fraud, but not enough to have an effect on the outcome. Right. I don’t believe him, the fact of the matter is nobody of importance wanted to stick their neck out and risk themselves when the coup was complete. The general consensus among gov’t employees was likely Trump is a circus and we want to go back to business as before. Its really that simple.

          • 0 avatar
            redapple

            28
            AND
            LOU

            Previous 3 presidential elections, mail in ballots were tossed out at a 4% rate. iMPROPERLY FILLED SIGNED, MISSING SIGNATURES, MULTIPLE CANDIDATES SELECTED IN SAME RACE AND SO FORTH. Bidet won in an electiOn where 0.4% were thrown out.

            At the same time mail ballots went from 10,000,000 in 2016 and before to 60,000,000 in 2020

            In an election where 50,000,000 PEOPLE ARE are voting by mail for the first time, you would think that the not completed CORRECTLY rate would GO UP – NOT DOWN.

            Uuuuh. THAT IS WHAT HAPPENED AND HOW THEY DID IT.

          • 0 avatar
            Lou_BC

            @redapple – “iMPROPERLY FILLED SIGNED, MISSING SIGNATURES, MULTIPLE CANDIDATES SELECTED IN SAME RACE AND SO FORTH.”

            That isn’t fraud.

  • avatar
    Jeff S

    Sergio might have been right and that was one of the main reasons he was so aggressive about seeking a merger. I doubt we have seen the end of mergers in the auto manufacturing business. GM itself could very well be a takeover target especially since GM has been aggressively reducing costs and pulling out of many global markets. GM is in a better cash position than many of its competitors. If a company is either too weak or strong it is a candidate for a takeover.

  • avatar
    Lou_BC

    Kinda sad when the competition has an excellent explanation of chip shortage!

    htt ps://ww w.auton ews. com/suppliers/chipmaker-speaks-how-it-looks-his-side

  • avatar
    ToolGuy

    Next up:
    • Lease extensions
    • Reserve-Your-New-Vehicle-Now-and-Drive-(THIS)-Until-We-Can-Build-It programs [the OEM’s will come up with better cutesy names]

    You heard it here first. (The advertising copy almost writes itself [look for the word “America” to be used a lot].)

    • 0 avatar
      slavuta

      “Next up:”

      We need to look what is behind – bailouts of blue cities/states bankruptcies.

      • 0 avatar
        dal20402

        The average blue state or city is in better fiscal shape than the average red one, mostly because blue jurisdictions actually tax sufficiently to cover their spending, but continue to tell yourself what you need to to survive.

  • avatar

    Fascinating political discussions aside:

    I read that part of the reason is that auto companies suck to work with and they are cheap compared to other buyers, so ended up at the end of the line for components….which would make sense.

    Practically it means keep whatever you have running. My local dealers have no stock to speak of.

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