Supply Chain, Chips, and Inflation: The Story Behind Low Sales
Following up on our sales post from earlier, we look to The New York Times, which has listed several possible reasons for why the numbers are dire.
The reasons are predictable, but that doesn't mean they aren't true.
Qualcomm Launches One Automotive Chip to Rule Them All
Qualcomm has released a new automotive processor chip designed to help contend with supply chain issues by handling both driver assistance features and the more standard functions tied to the infotainment system.
Stellantis CEO Says Chip Shortage Nowhere Near Ending
Stellantis CEO Carlos Tavares has suggested that the global semiconductor shortage will persist through 2023.
“The situation will remain very complicated until the end of 2023, then will ease a little,” he told French outlet Le Parisien over the weekend, adding that “semiconductor manufacturers have an interest in making business with us again, especially as they’re raising prices.”
BMW i4s Shipping With Apple CarPlay, Android Auto After All
Earlier reports that the BMW i4 would ship without Apple CarPlay or Android Auto, with the smartphone-mirroring systems set to be installed via over-the-air updates at a later time, appear to be incorrect.
Chip Shortage Lambasts Europe, Supply Chains Confront New Problems
Even though the global semiconductor shortage has been going strong for about two years now, the world has failed to successfully manage the situation. Production stoppages remain relatively common within the automotive sector, with manufacturers continuing to attribute factory stalls to an inability to procure a sufficient number of chips. But the excuse seems to have evolved into a catch-all explanation for supply chain issues that continue that go beyond a single missing component.
That makes it a little hard to determine precisely how much of the ongoing production shortfalls can be pinned on semiconductors. But AutoForecast Solutions (AFS) was keen to take a whack at it and determined roughly 1.4 million vehicles have been removed from the automotive industry’s targeted output for 2022 — that’s on top of the 10.5 million units we lost in 2021. While the issue is indeed global, AFS stated that the last batch of vehicles to get the ax was predominantly from Europe.
Will Intel's Ohio Chip Plants Fix Automotive Supply Chains?
Intel has announced a $20 billion investment to transform a 1,000-acre plot in New Albany, Ohio, into the latest addition to its U.S. chip-manufacturing hub. Construction is scheduled to commence later this year with operations starting in 2025. But everyone’s wondering if it is going to be enough to rectify the pathetic state in which domestic vehicle production currently finds itself.
Toyota Confronting Widespread Factory Stalls in Asia
Toyota Motor Corp is currently having to contend with idle factories in Asia, reducing the automaker’s estimated output by over 47,000 units this month. Shockingly, it’s not alleged to have anything to do with the semiconductor shortage that’s been wreaking havoc on Western markets.
With chip production having been localized primarily in China and Taiwan, Asian suppliers have had better access to them. But Eastern markets have still been subjected to other routine plant closures due to supply chain restrictions stemming from the pandemic. Existing protocols in China, combined with renewed restrictions in Japan, have created a situation impacting numerous automakers with Toyota announcing this week that it probably won’t reach its goal of manufacturing 9 million cars this year — though it made sure to include the ongoing semiconductor issue as relevant.
Mustang Production Paused at Flat Rock Assembly
Ford will be idling Mustang production this week due to an insufficient supply of semiconductor chips. For all the talk the industry made about getting over supply chain hurdles in 2021, manufacturers continue citing insufficient access to microchips as the primary obstacle preventing them from enjoying more routine operations.
The automaker confirmed the move on Tuesday, explaining that Michigan’s Flat Rock Assembly will be down until sometime next week.
Report: Biden Admin May Link Semiconductor Subsidies to Unions
Despite the semiconductor shortage having encouraged the automotive sector to repeatedly idle factories, word on the ground is that things are becoming more stable. Companies are seeing less production downtime overall and workers are reporting more reliable working conditions across the board. However, several automakers have continued to express concerns (e.g. Volvo), alleging that chip shortages could stretch deep into 2022, while the U.S. government ponders how to advance chip production in-country and become less dependent on Asian suppliers.
Commerce Secretary Gina Raimondo has been touring Michigan, meeting with union members and industry heads, and plans to urge Congress to move on a $52 billion in funding bill aimed at boosting domestic production. We’ve questioned the efficacy of the CHIPS Act before, primarily in relation to how the subsidies would be allocated. But there are new concerns that the plan will mimic the Biden administration’s EV subsidies by spending heaps of taxpayer money and giving union-backed organizations a larger cut.
Automakers Accused of Chip Hoarding, U.S. Considers Defense Production Act
Despite the occasional media report claiming that the semiconductor shortage is nearly over, reality looks quite a bit different. Some manufacturers have managed to temporarily stabilize supply chains, even though others have continued announcing work stoppages as they run out of chips. Wait times for the electronic components have also increased by about 61 percent since the beginning of 2021. Meanwhile, a recent Kelly Blue Book survey had 48 percent of respondents saying they were going to postpone buying a new automobile until shortages end, prices come down, and they can actually find the vehicles they’re looking for. But even those that were willing to buy now expressed a surprising level of acceptance to abandon brand loyalty or their preferred body style just to get a fairer deal on an automobile.
With the United States fairing worse than other regions in regard to chip availability, the White House has been under pressure to solve the problem all year. Thus far, government strategy has focused on encouraging investments for new semiconductor production. But there’s a new gambit being proposed that would invoke a Cold War-era national security law that would force manufacturers to furnish information pertaining to semiconductor supply lines and chip sales.
Chip Shortage Leads to 'Dead' Cars On Factory Lots, GM Halts Truck Production
Have you heard the one about the dead cars? No, not the ones we find in junkyards, but the ones that haven’t had life yet, thanks to the chip shortage.
QOTD: Should the U.S. Produce Its Own Semiconductor Chips?
Now that it’s effectively too late to avoid a crisis, the United States has begun asking itself whether or not now is the time to put into motion a plan that will eventually lead to the nation manufacturing its own semiconductor chips. As you’re undoubtedly aware, the automotive sector has taken a beating as Asian-based supply chains are experiencing what can only be described as unprecedented demand. But they aren’t building enough to satisfy everyone and the local markets are taking precedent.
U.S. Commerce Secretary Gina Raimondo proposed a $52-billion solution on Monday that would cram fresh government funds into production and research that could result in seven to 10 new U.S. factories. But that’s just to get the ball rolling on an industry that will take several years to mature, leaving some to wonder whether the country should even bother.
Chip Shortage Forces Ford Into Inventory Shortage
If you want to buy a Ford, you might have to hurry.
The microchip shortage could leave at least some Ford dealers short on inventory until perhaps August, according to Automotive News.
Chip Shortage Forcing Daimler to Stall Production
In today’s update on the semiconductor shortage, we learn that Daimler has elected to place over 18,000 Mercedes-Benz employees on reduced schedules. With an insufficient number of chips, the manufacturer cannot produce vehicles with sufficient reliability and has decided to ease off until resupplies are more predictable. Unfortunately, that’s unlikely to happen for at least a few months — forcing Mercedes to roll with the punches much like Subaru, General Motors, and Ford. Though this is a problem that’s impacting the entirety of the automotive industry.
Daimler made its announcement on Wednesday, stating that facilities in Bremen and Rastatt will be the first (and hopefully only) plants affected by the stall.
Chip Shortage: Subaru Shutting Down SIA Through April
Today’s update on the global semiconductor shortage involves Subaru, which recently announced that it would be suspending production at its plant in Indiana. Lafayette’s Subaru of Indiana Automotive (SIA) will be idled through the end of April while the automaker waits for suppliers to catch up. It’s a situation we’ve seen numerous manufacturers forced into this year, with Ford arguably being the most relevant for the North American market.