A Side of Chips: Analysts Worsen Outlook for '22, Remain Better Than '21 Levels

Matthew Guy
by Matthew Guy
a side of chips analysts worsen outlook for 22 remain better than 21 levels

It seems this calendar year will improve in terms of supply chain challenges for many auto manufacturers, with a general consensus that new chip sources will alleviate some of last year’s snarls. Still, one forward-looking group of analysts have peered into a crystal ball and determined all hands might not be out of the woods quite yet.

According to eggheads at an outfit called AutoForecast Solutions, roughly 71,000 vehicles have been cut from production at American car factories so far this year. Using calculations and estimates which surely involve some measure of dark magic, the group suggests the country could delete nearly a quarter-million machines from its assembly lines by the time Santa Claus shows up in December.

For perspective, the same analysts reported the American auto industry was off by about 3.4 million cars and trucks in 2021, largely thanks to the global chip shortage. The numbers reported by AFS today are an upward revision compared to estimates made earlier in the year, so please pay no mind to any sensationalist headlines spouting assertations that there will be large increases in production cuts this year. While that statement may be true when comparing these estimates to those of early January, they pale in comparison to what happed in factories across our nation last year.

Production of vehicles in America has hovered around 16 million units since the mid-‘90s according to this chart from Statista, save for a plunge in 2009 when the industry was in dire straits and bankruptcies flew around like rice at a wedding. This same group pegs 2020 production numbers around 13.5 million. Taken with the AFS estimate that the industry bled about 3.4 million units in 2021, that’d put last year’s output just slightly more than the bad-old-days of ’09. Given the dearth of product on some dealer lots, it’s a plausible stat.

Car companies are improving their output compared to 2021 thanks to some creative chip usage (or procurement). Plans are in the works for domestic production of the things, along with new agreements being signed with different chip suppliers. Some companies have taken to deleting certain chip-driven features from their vehicles in order to stretch their existing supply of chips; GM, for example, has binned several items such as parking beepers and active fuel management engine gubbins. Some pickups and SUVs have also lost their temperature setting readouts on dashboard control dials. Other manufacturers are deploying similar tricks.

[Image: General Motors]

Join the conversation
3 of 21 comments
  • Inside Looking Out Inside Looking Out on Jan 31, 2022

    All the problems will be resolved right before the midterm elections.

  • Lorenzo Lorenzo on Feb 01, 2022

    Maybe if automakers limit themselves to the computer chips needed to make the vehicles operate, and cut back on the infotainment, they'll be able to maintain normal production? I realize all those "features" which many people don't use add to the price and profit margin, but it would seem logical that a 25% reduction in volume would eat heavily into those margins.

    • CKNSLS Sierra SLT CKNSLS Sierra SLT on Feb 01, 2022

      Lorenzo- The number option car buyers want are heated seats. Then usually that package contains a heated steering wheel as well. Believe it or not-many buyers will base their buying decision on that Infotainment system with everything else being equal. All require chips. The RAM pickup sales shot up tremendously (out selling Silverados) when their interior was redesigned and contained a very large (in it's segment) screen. So-small screens and the manual transmission are not coming back.....

  • CEastwood Seven mil nitrile gloves from Harbor Freight for oil changes and such and the thicker heavy duty gripper gloves from Wally World for most everything else . Hell we used to use no gloves for any of that and when we did it was usually the white cloth gloves bought by the dozen or the gray striped cuff ones for heavy duty use . Old man rant over , but I laugh when I see these types of gloves in a bargain bin at Home Cheapo for 15 bucks a pair !
  • Not Previous Used Car of the Day entries that spent decades in the weeds would still be a better purchase than this car. The sucker who takes on this depreciated machine will learn the hard way that a cheap German car is actually a very expensive way to drive around.
  • Bullnuke Well, production cuts may be due to transport-to-market issues. The MV Fremantle Highway is in a Rotterdam shipyard undergoing repairs from the last shipment of VW products (along with BMW and others) and to adequately fireproof it. The word in the shipping community is that insurance necessary for ships moving EVs is under serious review.
  • Frank Wait until the gov't subsidies end, you aint seen nothing yet. Ive been "on the floor" when they pulled them for fuel efficient vehicles back during/after the recession and the sales of those cars stopped dead in their tracks
  • Vulpine The issue is really stupidly simple; both names can be taken the wrong way by those who enjoy abusing language. Implying a certain piece of anatomy is a sign of juvenile idiocy which is what triggered the original name-change. The problem was not caused by the company but rather by those who continuously ridiculed the original name for the purpose of VERY low-brow humor.