Tag: supply

By on April 6, 2021

us-capitol, public domain

The Alliance for Auto Innovation (AAI) is hard at work begging the federal government for help while the world continues coping with the semiconductor chip shortage, though it’s hardly the first time the industry has asked for or received administrative assistance. With pandemic lockdowns throwing global supply chains into a tailspin, U.S President Joe Biden said his administration would be seeking $37 billion and new legislation to address the chip shortage while federal agencies were directed to see what could be done in the interim.

But there’s little to be done with the brunt of the relevant manufacturing taking place in Asia, hence the AAI lobby requesting U.S. Commerce Department set aside some cash for domestic chip production in a new bill.  (Read More…)

By on March 5, 2021

You’ve no doubt heard about the chip shortage sweeping the automotive industry. But have you heard of the foam shortage? That’s right, there’s a dazzling new deficit of supplies in the manufacturing sector and it’s affecting your seats. The semiconductor crisis is so winter. Next season’s hottest supply trend involves those lovely little petrochemicals necessary for foam production.

Texas storms that left millions without power last month, during one of the coldest winters in the region, could have reportedly shorted oil refinery output to a worrying degree. There is now an underabundance of refinery byproducts used to make propylene oxide, which is required to produce polyurethane foam, which is used to manufacture car seats.

(Read More…)

By on February 25, 2021

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On Wednesday, Ford CEO Jim Farley told attendees of the Wolfe Research Auto Conference that the United States needs to start building batteries for the industry’s planned deluge of electric vehicles now that semiconductor shortages have revealed the dangers of needing to source essential components from the other side of the planet.

Farley is likely correct in stating that America really should be able to supply itself, and not just in regard to semiconductor chips. Pandemic-related lockdowns crippled countless industries by upsetting the balance of supply lines. Halfway through 2020, farmers were dumping millions of gallons of milk per day and plowing up fields of eatable vegetables as restaurants were shutdown; factories were idled as part shortages became commonplace; cleaning supplies and disinfectants became impossible to find.

But it’s hard to translate that into sympathy for Ford because, while all of the above was happening, the automaker’s leadership was saying that there was no good reason to manufacture its own batteries.

(Read More…)

By on February 5, 2021

Residual complications from COVID-19 lockdowns and overdependency on Central Asian suppliers have left most of the automotive industry fretting over where they’ll be sourcing their semiconductor chips in 2021. What started as an issue forcing a handful of manufacturers to rejigger their assembly schedules has evolved into a worldwide problem. This week, practically every automaker with a global footprint announced that it would be suspending production at key facilities to contend with the shortage or issued warnings that their Q1 earnings might be negatively impacted if supply failed to stabilize.

On Thursday, Volkswagen Group decided this was unacceptable and demanded that something be done about it in Europe — which is the region that has arguably been hit the hardest.  (Read More…)

By on February 5, 2021

Indonesia has reportedly received an investment proposal from Tesla Inc. requesting access to its nickel reserves. Once the largest producer of nickel in the entire world, Indonesia’s government started enacting regulations on the exportation of specific mineral ores in an effort to boost the local smelting industry and set up a more robust supply chain focused on lithium batteries.

This resulted in a huge price surge in 2019, as the nation began running mining opportunities under the noses of various industries that would be interested in the raw materials necessary for battery production.

(Read More…)

By on February 4, 2021

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(Read More…)

By on September 14, 2020

Not that it should be any surprise with pricing creeping up, but U.S. vehicle inventories are some of the lowest we’ve seen in roughly a decade. Unfortunately, it’s difficult to get a solid estimate on supplies as many automakers no longer have the balls to conduct monthly reports, at least not any they’re willing to share. The few that still do have been a little light on the lot, however.

Going into fall, we’d expect to see supplies around the 60-day mark with about a quarter of those vehicles representing the upcoming model year. Mainstream brands seem to be running with a lot fewer cars this month. On Monday, Automotive News estimated that September was probably representing the lightest industry-wide supply of vehicles since October of 2011. Meanwhile, Cox Automotive has the industry sitting on 56 days worth of cars — noting that national inventories shrank to 2.26 million vehicles, or about 870,000 fewer from the year before.

(Read More…)

By on August 17, 2020

Car dealerships around the nation are reportedly having trouble restocking inventories following the prolonged production shutdowns enacted in response to the pandemic. Despite supply chain issues subsiding a bit, Cox Automotive reported the industry only has a 62-day supply of vehicles. That’s approximately 2.3 million sparkly new units, and would be more than enough to keep consumers happy if people didn’t care which model they drove home. Demand may still be suppressed, but the selective nature of shoppers is not.

For example, you may be able to find a Nissan Rogue (the brand’s biggest seller) without much hassle. But finding one equipped how you wanted may be outside the realm of possibility in 2020, depending upon where you live and the fickle winds of fate. And you could apply that same logic to any number of brands, as most continue to note that some suppliers and assembly lines occasionally have to shut down to comply with health mandates. (Read More…)

By on July 10, 2020

toyota

Fall holiday discounts aside, the height of summer is typically a good time to head out and buy a car. The weather’s good, new models are rolling into dealers, and markdowns are appearing on older stock taking up precious space. Yet 2020 is anything but a normal year.

As the industry struggles to regain the volume it once enjoyed, threadbare inventories continue to plague automakers, though not everyone’s equal in this exercise. (Read More…)

By on June 1, 2020

Mexico is attempting to accelerate parts production to ensure North American automakers have enough components on hand to stay operational. The response to the pandemic saw manufacturing stalled worldwide as governments assessed whether or not we’d soon be living through a plague of biblical proportions. While fate decreed a repeat of the Black Death would not be necessary, untold damage resulted in numerous business sectors.

The automotive industry hardly went unscathed. Lockdowns stopped sales in many markets for months and plunged supply chains into turmoil as OEMs shut down to ensure staff were helping to “flatten the curve.” With the public’s interest shifting rapidly away from coronavirus mandates toward demonstrations about police brutality and racial justice, or simply devolving into riots because people are pretty angry about how poorly 2020 is playing out, suppliers and automakers are gradually moving back to more normal production schedules.

This has been easier said than done. But it is being done, and that’s the important thing.  (Read More…)

By on February 12, 2020

With Europe increasingly fixated on regulating vehicular emissions, German automakers are throwing themselves into electrification like ’90s moms did with Beanie Babies. As with those moms, the investment has yet to pay off. Still, that hasn’t encouraged anyone to change course. Every player understood from the outset that transitioning to EVs was bound to be costly and, with increasingly stringent regulations proposed every month, there aren’t many alternatives.

Volkswagen placed its very existence on electrification after Dieselgate, quickly running into problems with battery suppliers. And while VW claims it’s solved the issue for the next few years, it isn’t out of the woods yet. VW and Daimler have reportedly commissioned a study into sustainable lithium mining in Chile, but it’s already receiving pushback from environmental groups concerned about the delicate nature of the region’s Atacama salt flat — where the metal is found in abundance.  (Read More…)

By on November 13, 2019

The lithium industry — essential for the production of battery electric vehicles — has run into a problem. It’s currently amassing more of the metal than it needs. Despite automakers like Tesla suggesting there will be upcoming global shortages of metals like copper, nickel, and lithium, the only element that battery suppliers appear to be truly desperate for is cobalt, which is largely the fault of where and how it’s mined (the Congo, often by children).

Demand for the brittle, bluish metal skyrocketed this year, but not lithium. The latter metal’s global supply currently exceeds demand by about 5 percent, according to data from Canaccord Genuity.  (Read More…)

By on February 11, 2019

Subaru Legacy 2018 Logo Emblem Grille

Subaru’s sales in the United States effectively tripled in the past decade, making it the most important market for the brand by a wide margin. However, the automaker has had to expend quite a bit of energy in its home country of Japan to address recalls and regulatory scandals over the last few years.

While the duality hasn’t caused issues on a global scale, many observers wonder how long its good fortune will last. In America, Subaru is a feel-good brand that uses love as a core marketing concept to improve sales. In Japan, it has become synonymous with overworking employees lacking compensation, regulatory scandals, sudden work stoppages, and recalls. Many believe it’s only a matter of time before Subaru of America will have to contend with Japan’s issues, and evidence exists that problems are already beginning to surface in the West. (Read More…)

By on February 12, 2018

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Nissan has long-standing tradition in North America of being a bargain brand. While the automaker fields plenty of affordable options with a base MSRP undercutting that of its rivals, it has also leaned on aggressive incentivizing and heavy fleet sales. This helped Nissan chase volume in the U.S., but CEO Hiroto Saikawa is no longer convinced it’s a winning strategy.

He’s tasking Denis Le Vot, Nissan’s new North American boss, to improve profitability and brand value after the company’s operating profit dipped 50 percent in the region in the last quarter of 2017.

It’s a tall order for Le Vot, who has only had a little over one month to settle into being the regional chairman for the brand, and Saikawa is only giving him another two to figure out how to pull it off. However, he’s hinting at a strategy that eases off dealers, offers fewer market incentives, and ditches a reliance on fleet sales.  (Read More…)

By on November 7, 2017

The deal reached with striking autoworkers in Ingersoll, Ontario, last month prevented the supply of hot-selling Chevrolet Equinox crossovers from reaching critical levels, but we now know just how bare the cupboard was.

After a high of 74 days of supply in June, rising sales meant inventory of the newly redesigned compact crossover shrunk to 53 days’ worth at the beginning of September, shortly before the month-long strike began. It plummeted thereafter. With another month of Equinox sales gains under its belt, GM is busy making up for lost production. (Read More…)

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