#SupplyChainIssues
QOTD: Has the Global Vehicle Market Recovered?
Is the global vehicle market in recovery following the 2020 downturn? Data analysts GlobalData seem to think the market is firmly in recovery mode, according to their latest report.
Rubber Shortages Become Latest Problem for Auto Industry
Those of you tracking the semiconductor shortage can probably take it easy for a while, as practically every industry group on the planet has tentatively agreed we’ll be seeing a chip deficit for a few years. Meanwhile, market analysts are trying to predict the next material we won’t have enough of and rubber is looking like an ideal candidate.
Rubber supplies are drying up and price increases are reportedly beginning to climb at an untenable pace. Despite several years of relatively stable availability and low prices, supply chain disruptions created by lockdowns have left latex harvesters in a bad position. Low prices encouraged many to over harvest their existing crop, rather than invest in farmland. But with shortages looking probable as countries began responding to the pandemic, China went on a buying spree to maintain a robust national stockpile in 2020. The United States was late to the party and now finds itself in a position where scarcity is driving rubber prices through the roof just when it needs to buy more.
Toyota Pauses Production at 9 Plants Following Weekend Earthquake
Japan was struck by a 7.1 magnitude earthquake over the weekend. The Fukushima and Miyagi prefectures were hit the hardest, offering a physical reminder of the 9.0 magnitude quake that devastated the region in 2011. Scientists have claimed that Saturday’s tremor was actually an aftershock from the horror show that occurred a decade earlier.
While still a large systemic event, authorities aren’t reporting widespread injuries or even damages. However, many citizens were left without power and numerous industrial facilities were idled for inspection. This includes automakers, with Toyota making an announcement that it will be stalling nine factories for several days this week. Though only some of that time is needed for safety assessments. The automaker is fretting over a batch of suppliers that were impacted by the quake and is anticipating a parts shortage.
Pass the Chips: VW Group Demands More Semiconductors for Europe
Chip Shortage Expands, GM Forced to Idle Factories
While the Great Semiconductor Shortage of 2021 probably isn’t going to the defining historical topic of the modern era, it’s presently doing a number on the automotive industry. Volkswagen Group, Ford, Mazda, Nissan, Subaru Corp., Toyota, and Stellantis have all reported the need to scale back production this year.
On Wednesday, General Motors said that it would also have to handle the issue by closing down four plants next week. Affected sites include Kansas’ Fairfax Assembly, Ontario’s CAMI Assembly, and Mexico’s San Luis Potosí Assembly. GM Korea will likewise be operating Bupyeong 2 at half capacity, according to Reuters.
GM Runs Out of Corvette Parts, Production Paused
The C8 Chevrolet Corvette has certainly seen its share of hardships. Despite the vehicle receiving almost unanimous approval from those fortunate enough to get some cockpit time, it has been subject to numerous delays through no fault of its own. Union negations held last fall resulted in a 40-day UAW strike that pushed assembly of the mid-engine Corvette from the tail end of 2019 to the start of 2020. Of course, this butted its launch up against a global pandemic that forced General Motors to shut down production facilities for two months. Shutdowns likewise affected parts suppliers who were also made subject to government restrictions, causing bottlenecks across the industry.
Combined, these issues have forced GM to reduce the number of planned options. Many parts were proving too difficult to source with any reliability and the cars have become notoriously difficult to procure. While the manufacturer has said it would continue building the 2020 model year for as long as possible, supply is unlikely to meet demand until 2021. But the headaches haven’t abated just yet; GM has been forced to stall production on the C8 this week after running out of the necessary parts.
Subaru Extends Shutdown, Cites Unpredictable Chinese Supply Chains
Subaru is joining the long list of automakers closing shop on account of the coronavirus. Japanese production is being suspended at the automaker’s main plaint in the country’s Gunma prefecture from April 11th through the first of May. It’s also idling the Oizumi engine facility as it announces plans to extend the suspension of its U.S. facility in Indiana. The plant will now be idled through April 20th.
While some of the closures are due to social distancing obligations, the rest is down to parts allocation. Subaru is heavily reliant on components manufactured in China, and it’s still not clear how things are actually going there. What is clear is that Subaru (and plenty of other manufacturers) can’t do without its robust industrial sector operating at full strength. Subaru CFO Toshiaki Okada said in February that “it’s impossible to manufacture cars without China.”
Recent Comments