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January 12, 2021

Chip shortage cuts more vehicle production

Ford, Toyota, Fiat Chrysler Automobiles and Nissan Motor have all said they would cut vehicle production this month due to a shortage of semiconductors as demand rebounds from the coronavirus crisis.

By Olly Wehring

Ford, Toyota, Fiat Chrysler Automobiles and Nissan Motor have all said they would cut vehicle production this month due to a shortage of semiconductors as demand rebounds from the coronavirus crisis.

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How is Toyota ensuring its future success?

Toyota is accelerating digital growth and serving their clients better. The company is investing in emerging technologies to maintain its segment operations, drive site traffic and revive its business prospects amid COVID-19.  Toyota AI Ventures along with Toyota Research Institute (TRI) launched the Call for Innovation initiative to promote innovation around robotics technology. It made a significant amount of investment in startups working on mobile technologies for assistive robots.  Our Enterprise Tech Ecosystem report on Toyota provides you with information and insights into their digital transformation strategies, including: 
  • Overview of technology initiatives covering partnerships, product launches and investments 
  • Insights into its accelerator & innovation programs 
  • Details of estimated ICT budgets and major ICT contracts 
  • Partnership network map 
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by GlobalData
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A Reuters report noted Honda has said earlier its output in Japan could be affected by a shortage of semiconductors.

Automakers and electronic makers are facing a global shortage of chips as consumer demand has been bouncing back from the coronavirus pandemic, causing manufacturing delays, the news agency said.

According to the report, Credit Suisse analyst Daniel Levy said in a research note the chip supply issues may limit near term auto production for the industry but industry officials said they were prioritising production of higher profit vehicles.

Reuters reported major auto chip suppliers such as NXP Semiconductor has said vehicle production rebounded faster than expected from the pandemic, leaving them struggling to catch up.

In addition, chip manufacturing capacity had been stretched thin globally as laptops sell fast for working from home, and PCs and gaming consoles sell heavily, leading firms such as Nvidia to warn of supply constraints.

A move by US regulators to blacklist China's Semiconductor Manufacturing International, the country's largest contract chipmaker, has sent chip firms around the world scrambling to find new partners, the report noted.

Ford told Reuters it would idle its Louisville, Kentucky, assembly plant, which builds the Escape and Lincoln Corsair SUVs, pulling ahead a scheduled week off from later in the year.

Fiat Chrysler said it would delay the restart of production at its Toluca, Mexico plant, where it builds the Jeep Compass, and idle its Brampton, Ontario plant that builds the Chrysler 300, Dodge Charger and Dodge Challenger cars.

The Mexican plant had been due to restart production next week, but now both plants will be shut through the end of the month, FCA told Reuters.

Toyota would cut production of its Tundra full-size pickup truck at its San Antonio, Texas, plant, but spokesman Scott Vazin did not immediately know how many units would be lost. "We'll throttle back production," he told Reuters, adding no other US vehicles were affected.

Ford declined to identify the chip supplier and spokeswoman Kelli Felker told the news agency the company hopes to have the plant operating again the following week. "We are working closely with suppliers to address potential production constraints tied to the global semiconductor shortage," she said.

Nissan said it planned to reduce production of the Note, its new hybrid electric, at its Oppama Plant in Kanagawa prefecture, Japan but did not give details of the scale of the output cut.

Citing the Nikkei, Reuters said Nissan would slash Note production to about 5,000 units in January, from an initially planned 15,000.

The report noted Volkswagen had said last month it faced a shortage in the supply of semiconductors and would adjust production at factories in China, North America and Europe.

Honda has also begun "seeing some impact in the parts supply," a company spokesman said. It would first shrink output by about 4,000 units this month, affecting mainly the Fit [Jazz] subcompact made in Suzuka in Mie prefecture, the Nikkei said, according to Reuters.

A massive fire at a chip plant owned by Asahi Kasei Microdevices (AKM), a unit of Asahi Kasei, in southern Japan in October has also damaged semiconductor supply, the report noted.

Separately, GAC told Reuters its joint venture with Honda had received warnings on supply of certain models but gave no details.

Dongfeng Motor, which also has a partnership with Honda, did not immediately respond to a Reuters request for comment.

General Motors and BMW have said they had not yet been affected by the chip shortage but were monitoring the situation closely.

Free Report
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How is Toyota ensuring its future success?

Toyota is accelerating digital growth and serving their clients better. The company is investing in emerging technologies to maintain its segment operations, drive site traffic and revive its business prospects amid COVID-19.  Toyota AI Ventures along with Toyota Research Institute (TRI) launched the Call for Innovation initiative to promote innovation around robotics technology. It made a significant amount of investment in startups working on mobile technologies for assistive robots.  Our Enterprise Tech Ecosystem report on Toyota provides you with information and insights into their digital transformation strategies, including: 
  • Overview of technology initiatives covering partnerships, product launches and investments 
  • Insights into its accelerator & innovation programs 
  • Details of estimated ICT budgets and major ICT contracts 
  • Partnership network map 
Download the full report to align your strategies for success and get ahead of the competition. 
by GlobalData
Enter your details here to receive your free Report.

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