Daily Management Review

Nissan, Stellantis, Nio Impose More Production Curbs Because Of Chip Shortage


Nissan, Stellantis, Nio Impose More Production Curbs Because Of Chip Shortage
The latest car manufacturers to announce curbs in production because of the global shortage of auto chips include Stellantis NV and Chinese electric vehicle maker Nio.
Production at its five North American plants will be halted starting next week, Stellantis said on Friday due to the global microchip shortage. This include production cuts at two of its assembly plants in Canada, one in Mexico and two in the United States. The company said that the temporary halt I n production will continue till early to mid-April.
The manufacturing facilities that would be affected by the company’s decision to cut down on production will includes its Toluca, Mexico facility, where it make the Jeep Compass, the Windsor Assembly in Ontario where it assembles Chrysler Pacifica minivans; a plant in Illinois that makes the Jeep Cherokee SUV; a Michigan plant that builds the Ram 1500 Classic pickup and another Ontario facility where the company makes the Chrysler 300, Dodge Charger and Dodge Challenger.
While the company did not provide any specific details of how long the shutdowns would last, a union local in Windsor reportedly told the media that the minivan plant would halt production for four weeks starting on Monday.
Production at its Smyrna Vehicle and Canton Vehicle Assembly Plants and Mexico Aguascalientes plant will be halted by Nissan Motor Co, the company said on Friday. Normal production will resume on April 6.
One of the major rivals of the United States based electric car maker and Chinese market leader Tesla, the Chinese firm Nio will temporarily stop production at its Hefei plant for a period of five days, the company said. The company also cut its production target for the first quarter by as many as 1,000 vehicles.
The global chip shortage has already forced global auto makers such as Ford Motor, Honda Motor, General Motors and Volkswagen to announce production cuts even when there is a resurge in demand for cars globally and the world slowly revives from the pandemic.
According to estimates of the research firm AutoForecast Solutions, a loss of 130,000 vehicles because of production cuts due to the ship shortage has already happened in the global car industry as North America has been the most affected with about 74,000 cars ion lost production followed by Europe which has lost about 35,000 vehicles due to production cuts.  
The global chop shortage has been spurred by a sudden surge in demand for consumer electronics during the pandemic as people were forced to work and attend schools and colleges from home as well as entertain at home with outside facilities being closed or restricted. Another factors is the sanctions imposed on Chinese technology companies by the United States.
Ford announced on Thursday that it would idle halt production of the highly profitable F-150 trucks at a plant in Michigan through Sunday even though the company had until now being making the vehicles without certain parts.
Announcement of continuing with production suspension at plants in North America for the coming weeks was also made by GM and Japan's Honda.