The global shortage of computer chips is getting worse, forcing carmakers to temporarily close factories, including those made by popular trucks.
DETROIT: The global shortage of computer chips is getting worse, forcing carmakers to temporarily close factories, including those made by popular trucks.
General Motors announced Thursday that it would pause production at eight U.S. plants over the next two weeks, including two that make the company’s best-selling catch Chevrolet Silverado.
Ford will stop picking up at the Kansas City assembly plant for the next two weeks. Shifts will be reduced to two more truck plants in Dearborn, Michigan and Louisville, Kentucky.
The cuts will aggravate an already scarce supply of cars, trucks and SUVs in dealer lots across the country that have raised prices to record levels. Car manufacturers reported that U.S. dealerships had just under a million new vehicles in August, 72% less than the 3.58 million in August 2019.
“It now looks like it’s accelerating in the wrong direction,” said Jeff Schuster, president of global vehicle forecasting for LMC Automotive, a consulting firm.
“Now the outlook for new sales for the rest of the year continues to be tinged with the reality that restricted inventory will last until 2022,” said Kevin Roberts, director of industry information at Cargurus.com.
Demand for trucks, SUVs and other vehicles is strong, but buyers are frustrated due to lack of inventory and high prices. Light vehicle sales in the United States fell nearly 18 percent in August compared to a year ago, while the average vehicle sales price topped $ 41,000, a record, according to JD Power.
Ford F-Series truck sales fell nearly 23% during the month.
The fall in August sales and the lack of inventory caused Schuster to reduce its sales forecast for the United States for the year to 15.7 million. Until the success of the pandemic, sales had been around 17 million a year.
Consumers who need a new vehicle don’t have as many dealer supply options as short, Schuster said. Some have left the market because they can’t find anything that meets their needs. For others, “the price is through the roof, so they can’t afford it and aren’t willing to spend what it will cost to get that vehicle.”
GM will close the van plants in Fort Wayne, Indiana and Silao, Mexico, for a week starting Monday. A plant in Wentzville, Missouri that builds medium-sized vans and large vans will close for two weeks. Other plants that make small, medium-sized SUVs will be idling for two weeks or more.
“These recent scheduling adjustments are motivated by the continued shortage of parts caused by semiconductor supply restrictions in international markets experiencing restrictions related to COVID-19,” GM said in a statement.
GM and Ford cuts add to the temporary plant closures previously announced by Toyota, Nissan and Stellantis, formerly Fiat Chrysler.
Stellantis closed its Ram truck assembly plant in Sterling Heights, Michigan this week due to a shortage of chips. The small all-terrain vehicle plant in Belvidere, Illinois, and a minivan plant in Windsor, Ontario, have been down for two weeks.
Toyota said it would reduce production by at least 40 percent in Japan and North America over the next two months, reducing production by 360,000 vehicles worldwide in September alone.
Nissan, which announced in mid-August that the shortage of chips would force it to close its huge factory in Smyrna, Tennessee, for two weeks until Aug. 30, now says the shutdown will last four weeks, until to September 13th.
There is some good news. Ford said its overall production increased 76% from July to August, although it is unclear how long it would last.