Tuesday, 13 July 2021 23:01

Carmakers in North America Worst Hit by Semiconductor Shortage

Written by Marcus Williams, Automotive Logistics


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North American vehicle production has been the worst affected by the shortage in the supply of semiconductors, including for its high-profit, low-inventory vehicles, according to the latest research from AutoForecast Solutions.

It comes at a time of very high demand for vehicles in a market rebounding from the COVID lockdown. The question is, how will leading vehicle makers in the region position themselves so that this does not happen again?


Kicking off discussions at the recent Finished Vehicle Logistics North America Live conference, Joe McCabe, president and CEO, AutoForecast Solutions (AFS), said the impact of the semiconductor shortage on production volumes globally was forecast to equal 4.57m units this year, with 285 plants impacted around the world, as of June 15.


In North America, the forecast for vehicle production before the semiconductor crisis came to light was around 15.9m, according to AFS data. That has been revised down to 15.25m by AFS, meaning a significant amount of production has been lost.


The production shortfall is being exacerbated by other issues at the moment, including airfreight under-capacity and vessel congestion at the West Coast ports in the U.S., all of which is impacting critical part supply for the Asian-based OEMs in North America.


Impact on segments 


McCabe said the crossover vehicle (CUV) segment in North America was taking the brunt of the impact, with 48% of production affected by the semiconductor shortage. Crossovers are defined as those SUVs that share a platform with a passenger car rather than a pickup truck.


Around 16% of pick-up truck and large SUV production is also affected, which is hitting carmaker bottom lines quite hard as they are the highest profit vehicles, but these are all deemed recoverable in terms of production because vehicle makers do not want to lose such high value sales and will now find any means of getting them on the lots rather than sitting in storage waiting for microchips. That includes building the models with fewer chips.


“They are building [pick-up] trucks without features like start/stop and are going to analogue for the speedometers,” said McCabe. “They are [taking] out stuff that isn’t life-saving and pulling the content out just to get them on the market. You will see...

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