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Chip shortage continues to impact production

Global manufacturing still down, North America drops 87.5k units from schedule

24 May 2022

THE microprocessor shortage continues to wreak havoc on global vehicle production, with European and North American production facilities noting particularly significant losses over the latter part of May.


According to a report published in Automotive News, North American factories have removed approximately 87,500 vehicles from their production schedules, with European assembly facilities losing around 4,200 units from their combined output.


Year-to-date figures (see table below) show regional differences of over a quarter of a million units below forecasts, with European manufacturers the hardest hit. Figures show Europe is 263,200 units behind its expected forecast in May with North America 221,600 units down. Asian plants (including Japan, South Korea and Thailand, but excluding China) are short by 208,800 units.


Elsewhere, the figures are lower, but still show signs that recovery from the ongoing effects of the microprocessor shortage are far from over.


China is down 105,200 units on quoted production forecasts, while the Middle East and Africa are 10,000 units behind. South America is the least impacted overall at just 1,700 units shy of anticipated production.


Last week, US president Joe Biden toured the world’s largest semiconductor plant, owned by Samsung, in Pyeongtaek, alongside South Korean president Yoon Suk-yeol. 


Mr Biden was shown how wafer components from facilities in the United States – including the recently opened Samsung-owned semiconductor site in Taylor, Texas – were critical to the manufacturing capacity of the South Korean facility.


AutoForecast Solutions vice president of global vehicle forecasting Sam Fiorani said the “recent trip to South Korea could help broker a long-term answer to the North American chip supply issue”.


“Tackling the semiconductor shortage is a long-term problem because there is no expectation of fewer chips being used in vehicles as they become more complex,” Mr Fiorani told Automotive News.


“In the short term, however, the automotive industry continues to compete for limited fabrication space with other fields where more profitable chips are the norm. Expectations for a solution this year have faded and 2023 may not see a full recovery either.”


Mr Fiorani’s predictions echo those made recently by European heavyweights BMW and Volkswagen.


Last month, following cuts of 98,000 units from European factory schedules, the German manufacturers said they did not expect the situation to normalise until at least 2024, with Volkswagen’s chief financial officer Arno Antlitz saying he predicts “a structural undersupply” for at least the next 18 to 24 months.


BMW Group CEO Oliver Zipse made similar predictions in an interview with German newspaper Neue Zuercher Zeitung last month, but said he expected the situation to improve a little earlier.


“We are still at the height of the chip shortage (and) I expect us to start seeing improvements at the latest next year, but we will still have to deal with a fundamental shortage in 2023.”


European assembly plants continue to be affected by the ongoing microchip shortage even as the rest of the world’s vehicle production begins to normalise. Last month, AutoForecast Solutions added almost 98,000 vehicles to its global tally of variants that have been removed from manufacturers’ production schedules this year.


The latest forecasts show global production to be 810,500 units short of manufacturer’s forecasts.


2022 production figures by region:

Region Forecast YTD
Europe 1,050,900 787,700
North America  748,700 527,100
Rest of Asia 531,500 322,700
China 197,200 92,000
South America 73,300 71,600
Middle East/Africa 20,800 10,800

Figures courtesy AutoForecast Solutions.

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