Chip shortage excuse is getting old

Whether sales are rising or falling, automakers from the U.S. to China have found a catchall explanation: the global chip shortage. For the laggards, the excuse is getting old.

In the U.S., a shortfall of semiconductors has forced manufacturers to shift from making more cars to better ones. These vehicles are selling at a swift pace and have boosted margins. Sales are rising, too, albeit showing signs of slowing as inventories run low. Volkswagen AG reported its best first-half performance in the U.S. in almost half a century, while at General Motors Co., the figure increased by almost 40% over the same period…

The divergence in performance shows that some companies were able to rise to the challenges of the pandemic by remaining nimble and managing production effectively — traits that will become even more critical amid the transition to electric vehicles. Their competitors, still blaming crimped performance on the shortage, should be worried…

It’s hard to say when the chip shortage will abate. One thing is clear: The companies further along in readjusting to post-Covid life are likely to be the ones that can navigate the twists and turns on the road to next-generation cars. Those still blaming chips will likely be doing so for a while.

RTFA. Interesting to see who’s nimble, quick at switching available chips to models in greatest demand – or the manufacturers want to grow in market share.

10 thoughts on “Chip shortage excuse is getting old

  1. Schlörwagen says:

    Used car prices to stay high until automakers can fix production issues: Carvana CEO https://www.cnbc.com/2021/08/07/used-car-prices-to-stay-high-until-automakers-fix-production-issues.html
    Semiconductor chip shortages have led automakers including Ford and General Motors to cut production of vehicles this year.
    The shortage of new vehicles has added pricing pressure in the used car market.
    Carvana CEO Ernie Garcia says those prices will not start to fall until manufacturers can figure out their supply chain issues.
    The average transaction price for a used car was $25,410 in the second quarter of 2021, up 21% year-over-year, the highest average price for a pre-owned vehicle that Edmunds has ever tracked.

  2. p/s says:

    Congestion Takes Hold Again with Supply Chain Delays Spread Across the United States https://gcaptain.com/congestion-takes-hold-again-with-supply-chain-delays-spread-across-the-united-states/
    Truck Drivers and Container Chassis: The Peak Season Shortages to Expect https://www.supplychainbrain.com/blogs/1-think-tank/post/33275-peak-season-is-around-the-corner-what-can-we-expect-in-2021
    Wonder why it took so long to get that new car you ordered? The shortage of rail terminal space is a major reason for the widespread logistical bottlenecks that have occurred since the economy began recovering from the Covid pandemic.
    So-called “Precision Scheduled Railroading” (PSR) amounts to running fewer trains to fewer places using fewer employees, while imposing all kinds of new fees on shippers. Between 2014 and 2019, before COVID had any impact, the four largest railroads laid off 30,000 hard-to-replace employees such as locomotive mechanics and engineers, and since 1980, the number of major, or Class 1 railroads has shrunk from 33 to 7 – six if a proposed merger between Canadian National and Kansas City Southern wins regulatory approval.
    https://washingtonmonthly.com/2021/08/09/amtrak-joe-vs-the-modern-robber-barons/

  3. Update says:

    The stocks of Toyota, Volkswagen, Ford Motor, and other auto makers were tumbling Thursday amid reports that three of the world’s largest car companies face further production cuts due to the global shortage of semiconductors. https://www.barrons.com/articles/semiconductor-shortages-cars-stocks-51629374738?tesla=y
    China’s semiconductor output hits record high in July as new capacity added to meet strong demand.
    In the first seven months of the year, China’s total IC output reached a hefty 203.6 billion units, up 47.3 per cent compared with the same period a year earlier.
    Chip production is a priority in China’s five-year plan as the country braces for a heightened tech war with the US. https://www.scmp.com/tech/tech-trends/article/3145206/chinas-semiconductor-output-hits-record-high-july-new-capacity

  4. Update says:

    General Motors Co will halt production next week at its plants in the U.S., as well as Canada and Mexico. GM is also cutting production at eight North American assembly plants in September because of the ongoing industry wide semiconductor chip shortage.
    Earlier this week, Ford Motor Co said it will also cut truck production next week because of the chips shortage, while Toyota Motor Corp said last month it will slash global production for September by 40% from its previous plan. https://www.reuters.com/business/autos-transportation/gm-cut-north-american-production-citing-chip-shortage-2021-09-02/

  5. Update says:

    “Ford CEO: Semiconductor shortage is improving but will extend into next year https://finance.” yahoo.com/news/ford-ceo-semiconductor-shortage-is-improving-but-will-extend-into-next-year-131449129.html
    “China’s rolling power outages are the latest threat to global supply chains, which are still reeling from last year’s pandemic lockdowns. This week, ten Taiwanese semiconductor manufacturers warned the Taiwan stock exchange that production in factories in China’s Jiangsu province had been suspended for the week, following government orders to curb electricity usage. Several suppliers for Apple and Tesla announced temporary suspension of production facilities, too.” https://fortune.com/2021/09/28/china-energy-crisis-chip-shortage-supply-chain-delay/

  6. Cascade effect says:

    Biden administration is purposely “orchestrating” product shortages. https://www.factcheck.org/2021/10/posts-spread-baseless-claims-about-cause-of-cargo-ship-backups/
    The pandemic has exacerbated a situation that’s been building for years, as growing consumer demand for imported products comes up against an aging supply chain, John McLaurin, president of the Pacific Merchant Shipping Association, said in an interview with FactCheck.org.
    “We’ve never seen this amount of cargo,” McLaurin said. “At some point, you can’t violate the laws of physics. You can only move it so fast; you can only pile it so high, and then you just run out of space. We’re at that point, and we have been for a while.”
    Industry officials and observers dismissed the idea that the Biden administration is deliberately causing the logjam. “That’s not something anyone in the industry is talking about,” McLaurin said. “I just don’t see that.”
    The problem isn’t unique to the U.S., he noted. “It’s happening all over the world. There’s congestion throughout the supply chain.”
    The pandemic has exacerbated that congestion, as consumers shifted spending to goods and away from travel and entertainment, overwhelming the supply chain, the Washington Post reported.
    Washington Post: “Inside America’s Broken Supply Chain : How industry failures to collaborate and share information left the system vulnerable” https://www.washingtonpost.com/business/interactive/2021/supply-chain-issues/?itid=hp-top-table-main (interactive) Alternate source https://www.adn.com/nation-world/2021/10/03/inside-americas-broken-supply-chain/

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