Automakers resort to slashing production due to a shortage of semiconductors

Automakers resort to slashing production due to a shortage of semiconductors
Written by:
Wajeeh Khan
January 10, 2021
  • Automakers resort to slashing production due to a shortage of semiconductors.
  • Demand for semiconductors recovered quickly after the initial hit from the COVID-19 crisis.
  • United States' NHTSA finds no defects in review of 662 thousand Tesla vehicles.

Automakers including Toyota Motor Corp, Nissan Motor, Ford Motor Co (NYSE: F), and Fiat Chrysler Automobiles said on Friday that demand for semiconductors recovered quickly after the initial hit from the Coronavirus pandemic, but the supply was still lagging behind. Consequently, the car manufacturers said, they will resort to slashing vehicle production in January.

In a separate announcement, peer Honda Motor Co also warned that production might take a hit this month in Japan due to the shortage of semiconductor chips. Ford had also said in the first week of September that it will slash its North American workforce by 1,000 jobs to cushion the economic blow from the ongoing Coronavirus pandemic.

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Ford’s performance in the stock market

Ford shares closed roughly 1.5% down on Friday. The American multinational performed slightly downbeat in the stock market last year with an annual decline of close to 5%. At £6.62 per share, the stock has recovered sharply from a low of £2.96 per share in March 2020. At the time of writing, the Dearborn, Michigan-based company has a market capitalisation of £25.93 billion.

Fiat Chrysler was scheduled to resume production in mid-January at its plant located in Toluca, Mexico. Owing to the shortage of semiconductors, the automaker said on Friday that it will now take longer to restart production at this plant that manufactures Jeep Compass.

FCA also highlighted that its production facility in Brampton, Ontario that builds Dodge Charger, Chrysler 300, and Dodge Challenger cars will also shut down temporarily. U.S. carmaker Ford Motor also made a similar announcement regarding its plant in Louisville, Kentucky that manufactures Lincoln Corsair SUVs, and Ford Escape compact crossover vehicles.

U.S. NHTSA finds no defects in Tesla vehicles

In separate news from the auto industry, the National Highway Traffic Safety Administration (NHTSA) of the United States said on Friday that it found no defects in review of 662 thousand Tesla vehicles.

According to Toyota Motor, its production house in Antonio, Texas, will produce fewer units of Tundra (full-size pickup truck) in January. The Japanese auto manufacturer, however, refrained from divulging the exact number of units that are likely to be lost.

Nissan had originally expected to produce 15 thousand units of its Note mini MPV in January. As per the Nikkei newspaper, however, the automaker now forecasts a significantly lower 5 thousand units produced at its Oppama plant this month.