Carmakers scale back production further on semiconductor shortage

Halfway around the globe in Malaysia, COVID-19 cases have spiked badly in the past five weeks, and daily case counts in the nation of around 32 million have been surpassing 20,000 consistently. At least one Malaysian semiconductor chip supplier has been asked to shut their doors for the week by the government due to an outbreak.

Malaysia is one of the top producers worldwide for microchips required in the auto industry, and the latest outbreak is hitting carmaker production in the US acutely. While it appeared that chip production was resuming full capacity after the Renesas fire damage was resolved in Japan, the latest Malaysian outbreak is putting the pressure on with significant ripples across the pond.

A Tennessee Nissan plant was set to resume production after shuttering for two weeks after an earlier Malaysian outbreak at a microchip factory, but now other carmakers are feeling the squeeze.

Toyota forced to cut production by 40%

A total of 14 assembly plants in Japan will scale back production or close completely in September as they run out of parts for some of the world’s most popular models. It affects the production of the subcompact Corolla, Prius hybrid models, and the luxury Land Cruiser SUV.

In total, it’s expected that Toyota’s global production will be reduced by 360,000 units, of which 80,000 would have been destined for the US.

“We sincerely apologize for the inconvenience caused to our customers and suppliers due to these changes,” Toyota said in a statement.

Although the production cut is quite large, Toyota will remain on pace to produce 9.3 million units, the adjusted figure for 2021.

Ford F-150 production affected in KC

Ford’s Kansas City Assembly plant has trimmed this past Saturday’s F-150 super shift and the best-selling vehicle in North America won’t be built this week due to the Malaysian pandemic outbreak and chip shortage. While it will certainly affect supply to inventory-hungry dealers, production continues at the Dearborn, MI plant. The Claycomo plant in Kansas City has previously been halted for several weeks earlier this year.

General Motors models hit hard

The Orion Assembly plant in Lake Orion is one of GM’s factories that will be quieter this week. Electric vehicle production will be halted for the week in the factory where the Bolt EV and Bolt EUV are assembled.

That’s far from the bulb of it, though. Lansing Delta Township Assembly is adding downtime this week and next for the Chevrolet Traverse and Buick Enclave that have been down since July 19. The Lansing Grand River Assembly plant is pushing its downtime through the week of September 13, aiming to finally resume production of Cadillac CT4 and CT5 models for the first time since May 10.

Spring Hill Assembly in Tennessee, CAMI Assembly in Canada, and both Ramos Assembly and San Luis Potosi Assembly in Mexico have two weeks of downtime now scheduled in the coming weeks. GM spokesperson Dave Barnas confirmed in a statement that the “scheduling adjustments” are due to temporary shortages due to COVID-19.

“Although the situation remains complex and very fluid, we haven’t taken any full-size SUV production downtime due to the global shortage of semiconductors and have taken minimal downtime at our full-size pickup truck plants. We remain confident in our team’s ability to continue finding creative solutions to minimize the impact on our highest-demand and capacity-constrained vehicles.”

Volkswagen cutting to one shift at largest plant

After their typical summer break, Volkswagen’s largest plant in Wolfsburg will be restarting with just one shift this week. While VW has fared rather well through the pandemic – as has Toyota – it’s becoming more likely that Volkswagen will be cutting production through September by around 40% as well.

Vaccination efforts have been extremely strong in Malaysia and it’s expected that the nation could reach a 70% vaccination by mid-September, a milestone that should signal a turning point in chip shortages. Car manufacturers and retailers will see constrained supply for a little while yet, but the end is on the horizon.

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