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Global automakers feel the effect of supply chain shortages (Includes interview)

A man getting out of Samsung's future car concept. - Tim Sandle
A man getting out of Samsung's future car concept. - Tim Sandle

The main part that has been in short supply is not a physical component like wheels or chassis, instead the automobile sector has been rocked by the global issues with semi-conductors.

For example, the Chinese electric vehicle company NIO Inc. has temporarily suspended vehicle production in the JAC-NIO manufacturing plant due to global semiconductor shortage. The suspension is set to run for five days. In addition, Volkswagen has reported how semiconductor supply bottlenecks have led it to produce 100,000 fewer cars in the first quarter of the year at sites in Europe, North America and China.

For some analysts, this suspension to production comes as is inevitable as automakers and the supply chain chip industry have suffered from the impact of the pandemic.

Such is the demand for semiconductor chips that in February 2021, lead times have stretched to 15 weeks on average, which is the highest since records began. With cars, across the industry the summer is expected to see lower inventories, slightly less fuel-efficient vehicles and a potential price increase.

Looking into the issues, Richard Barnett, who is the chief marketing officer at Supplyframe states: “Semiconductor shortages are impacting vehicle manufacturers old and new from around the world.”

He adds: “This comes on the heels of General Motor’s move to cut production of its midsize pickups and Ford’s idling of the Michigan plant production of its popular F-150 pickup truck.”

These matters show the impact of electronic upon car production, as Barnett states: “All this highlights that electronics components have become essential for the automotive industry, and it points to the need for this sector and others that rely on semiconductors to leverage new forms of insights to better understand electronics supply chain dynamics and also to build resiliency into their new product designs and electronic component procurement strategies.”

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