Thursday, April 25, 2024


Platitudes about the global semiconductor shortage afflicting automotive and motorcycle manufacturers improving any time soon are rapidly crumbling, going forward through the autumn and beyond.

Toyota, the world’s biggest car manufacturer, initially cranked up the fear factor by slashing car production during September by 40%, after Covid outbreaks shuttered suppliers of microchips for brake systems in Malaysia and wiring harnesses in Vietnam.

Previously weathering the chip famine quite well, thanks to strategic stockpiling and particularly robust supply-chain maintenance, Toyota had managed to avoid the early impact of semiconductor manufacturers swerving just-in-time supply agreements and prioritising more lucrative contracts in telecoms and consumer electronics last year. But not anymore. Now, its annual output targets and sales forecasts are being savaged too, as stockpiles run down and increasingly scarce chip supplies dry up.

Falling back on traditional sources in Japan’s once dominant and loyal semiconductor industry, which produced more than half the world’s chips in its heyday, is no longer an option for Japanese auto/moto brands. Factories on home turf cling on to barely a 10% global share of the market and are fully stretched.

Voicing the concerns of his member companies, which include all of Japan’s leading car and motorcycle producers, Japanese Automobile Manufacturers Association (JAMA) vice-chairman Seiichi Nagatsuka said: “Uncertainties surrounding the bottlenecks in chip supplies will persist. It is difficult to foresee the impact of Covid resurgence beyond autumn.”

Specialist data provider AutoForecast Solutions recently predicted that production of 9.5 million vehicles could be lost because of the chip crisis during 2021 — an estimate revised upwards by an additional million from just the previous week.

In Europe, Volkswagen announced plans for extended production-line suspensions and widespread single-shift working at its SEAT Spanish car assembly plants around Barcelona in mid-September. These were set to come into effect almost immediately and run through to at least the end of June 2022.

SEAT had originally reduced output in the first half of this year. Then, when vehicle demand reached pre-pandemic levels, it tried to fully re-open its factories in August to offset dealer inventory shortfall, But within weeks, the company was forced to back-track, furloughing hundreds of employees.

The European Stellantis automotive conglomerate, a relatively fresh merger covering everything from Peugeot-Citroen PSA and Vauxhall through to the Fiat-Chrysler brands, is also in similar dire straits.

One example of grief entailed is the Peugeot factory at Rennes in north-west France. Bereft of consistent quantities of semiconductor-dependent componentry, Stellantis has simply shut the plant, furloughing its 600-strong workforce for the duration on short wages. Others dotted around the Stellantis empire are in receipt of the same fate.

In the US, both Ford and General Motors halved production in August and September at their domestic plants, most painfully those making particularly profitable pick-up trucks. Ford reported a 33% sales plunge in August. Neither could see any improvement on the horizon.

Statistics specific to disruption for powered two-wheeler manufacturers worldwide are hard to come by. Most admit to problems without detailing them and express hopes for recovery in the new year. But at the moment, it appears a full-on chips crisis is unabated.


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