Industry

Chip shortage impacts Stellantis, Nissan, Nio

Chinese electric vehicle start-up Nio Inc. vehicles are on display in front of the New York Stock Exchange.   | Photo Credit: REUTERS

Stellantis NV and Chinese electric vehicle maker Nio became the latest carmakers to announce new production cuts as a result of a global semiconductor chip shortage.

Stellantis said it would temporarily halt production at five North American plants next week because of the global microchip shortage: two assembly plants in Canada, one in Mexico and two in the United States. The production halts will start next week through early to mid-April.The plants affected are the company’s Toluca, Mexico facility, where it produces the Jeep Compass; Windsor Assembly in Ontario where it builds Chrysler Pacifica minivans; a plant in Illinois that builds the Jeep Cherokee SUV; a Michigan plant that builds the Ram 1500 Classic pickup and another Ontario plant that builds the Chrysler 300, Dodge Charger and Dodge Challenger.

Stellantis did not specify how long the shutdowns would last, but a union local in Windsor said the minivan plant would halt production for four weeks starting on Monday. Nissan Motor Co. said it would halt production for two days starting April 1 at its Smyrna Vehicle and Canton Vehicle Assembly Plants and Mexico Aguascalientes plant. Normal production will resume April 6.

Nio, which dominates the electric vehicle market in China, said it would halt production for five working days at its Hefei plant and cut its first-quarter delivery forecast by as much as 1,000 vehicles.

Chip shortages have cost the global auto industry 1.3 lakhvehicles in lost production, research firm AutoForecast Solutions estimated.

The chip scarcity is also a result of an increased demand from the consumer electronics industry as people worked from home and played more video games during the crisis. Sanctions against Chinese technology companies have also played a role.

Nio, which also faces competition from homegrown rivals such as Xpeng Inc, now expects to deliver 19,500 vehicles in the first quarter, down from a 20,000 Ford had warned the shortage could hit its 2021 profit by up to $2.5 billion, while larger U.S. automaker GM expects the crisis to shave up to $2 billion off its full-year profit.

Ford, which was until now assembled its highly profitable F-150 without certain parts, said on Thursday it would idle production of the trucks at a plant in Michigan through Sunday.

GM and Japan’s Honda both said this week they would continue production suspension at plants in North America for the coming weeks.

Swedish truck maker Volvo AB, meanwhile, said on Tuesday the chip shortage would have a “substantial” impact on its second-quarter earnings, and it would implement stop days across its sites globally beginning in April.

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Printable version | May 16, 2021 4:48:05 AM | https://www.thehindu.com/business/Industry/chip-shortage-impacts-stellantis-nissan-nio/article34179232.ece

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