Why is there an auto chip shortage?

Auto Chip Shortage

The semiconductor auto chip shortage has affected the auto industry in dramatic ways. Obviously, the biggest issue is how many plants are pausing production—and we’re here to let you know which major vehicles have their production currently affected by the chip shortage—but let’s not forget the Peugeot 308. Sure, it’s not available in the U.S., but Stellantis said this week that instead of the digital speedometers the car was going to have, it will now be produced with analog dials as a way to save chips to use in more popular models. Here’s hoping the upside is that these unexpected variants will be quirky collector’s items some day.

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Almost every automaker has been affected and forced to adjust production schedule in major ways. The consulting firm AlixPartners, cited by the Washington Post, estimated that the global auto industry will make somewhere between 1.5 million and five million fewer vehicles this year than originally expected. Volkswagen alone is down 100,000 vehicles for 2021, with the situation expected to worsen in the second quarter, and doesn’t expect to be able to make up the difference this year.

Exactly how long this situation will last is up in the air, but it appears like there’s darkness on the horizon. Taiwan, where many semiconductors are made, is suffering through a water shortage because no typhoons hit the island last year (which means aquifers are low) and rainfall for the first three months of 2021 was roughly half of the normal rate. Given this situation and many issues, the South China Morning Post reported this week that the chip shortage could last until 2022.

HOW THE CHIP SHORTAGE GOT STARTED

Audi Q7/Q8, Porsche Cayenne, Volkswagen Touareg
2019 porsche cayenne
MICHAEL SIMARICAR AND DRIVER

German business paper Handelsblatt reported on April 26 that the Volkswagen plant in Bratislava, Slovakia, will stop production of SUVs from April 29 through May 7 because of the chip shortage. The plant builds the VW Touareg and Porsche Cayenne (pictured) as well as the Audi Q7 and Q8. Production of smaller Europe-market cars, including the Volkswagen Up, Seat Mii, and Skoda Citigo, will continue.

Chevrolet Camaro, Equinox, Malibu, Traverse; Cadillac XT4/XT5/XT6; GMC Acadia
2021 cadillac camaro
CHEVROLET

Over 10,000 workers will have some sort of extended break at a long list of GM plants. Three plants—Spring Hill, Tennessee (which assembles the Cadillac XT5 and XT6 and the GMC Acadia), Delta Township, Michigan (Buick Enclave and Chevrolet Traverse), and Ramos Arizpe in Mexico (Chevrolet Blazer and Equinox) will shut down for one or two weeks. Three other plants—Lansing, Michigan (Cadillac CT4 and CT5, Chevrolet Camaro), Kansas City (Cadillac XT4, Chevrolet Malibu), and Ingersoll, Ontario (Equinox), will have their current shutdowns extended.

Ford F-150, Explorer, Mustang; Lincoln Aviator, Nautilus
2021 ford f 150 tremor
FORD

Ford has already been cutting back on production of the popular F-150 and Explorer, but the automaker said this week that it will keep production rates down at some plants for an extra week or two. Ford plants in Chicago, Flat Rock, and Kansas City will continue to be idle until after the week of May 10. These plants, and others, have been idled since mid-April, and the affected model list also includes the Mustang, Edge, and Transit van. Production of the Lincoln Aviator and Nautilus has also been affected.

Hyundai
car logos on a rainy day
NURPHOTOGETTY IMAGES

Hyundai apparently had plenty of chips in its supply to keep production moving in the early part of the year, but the company did say it would have to adjust its production numbers in May as it did in April. Beyond that, the picture becomes murky, a company spokesperson told Reuters in Korea, as do the names of the affected models. Earlier this month, the company’s Asan plant, which makes the Sonata for overseas markets, temporarily stopped production, and its main plant in Ulsan shut down for a week. There is no news about a production halt in the U.S. yet.

Jaguar XE, XF, F-Type; Land Rover Discovery, Range Rover Evoque
2021 land rover range rover evoque rear
LAND ROVER

The U.K.-based automaker will temporarily stop producing Jaguar XE, XF, and F-type vehicles at its Castle Bromwich plant, and Land Rover and Range Rover SUVs at its Halewood factory starting on April 26, Bloomberg reported. The Halewood plant produces the Land Rover Discovery Sport and the Range Rover Evoque (pictured). Production at the company’s Solihull facility, which builds the rest of the Range Rover lineup plus the Land Rover Defender and the Jaguar F-Pace, will not be affected.

Jeep Grand Cherokee, Dodge Durango
2021 jeep grand cherokee trackhawk
JEEP

Stellantis NV’s Jefferson North plant in Detroit will reduce its workers’ schedules in April and May. That means production of the Jeep Grand Cherokee and the Dodge Durango SUV will be affected by rotating layoffs through the end of May. The plant usually runs for 20 hours a day with three crews, but two crews will be laid off between April 26 and May 17, while the third crew will be laid off from May 17 to May 31, according to Automotive News.

Mercedes-Benz C-Class, GLC, EQC
2021 mercedes benz c class coupe side
MERCEDES-BENZ

Mercedes stopped building the C-class at its Alabama plant last year, but there’s no guarantee that production wouldn’t be affected even if it hadn’t. Daimler said that it will temporarily halt production at two of its plants in Germany, in Bremen and Rastatt, for at least one week. The C-class, the GLC crossover, and the EQC electric CUV are built in Bremen, while the Rastatt plant builds Mercedes’s compact cars.

Mitsubishi
2021 mitsubishi mirage
MITSUBISHI

According to Bloomberg, Mitsubishi built around 90,000 vehicles each month in January and February this year, so the news that the company will drop that number by 16,000 in May means around a fifth of the company’s global production will be affected by the chip shortage. Exactly which models will be pausing production is currently unclear, but a Mitsubishi spokesperson confirmed to Car and Driver that the affected models will come from factories in Okazaki and Mizushima, Japan, and Thailand. The Mirage (pictured) is produced in Thailand and elsewhere.

Nissan Altima, Leaf, Maxima, Murano, Rogue
2021 nissan altima
NISSAN

Nissan has not made an official announcement, but sources quoted by Japan Today said it will shut down its Kyushu, Japan, plant temporarily in mid-May. The plant builds the X-Trail SUV (known here as the Rogue), among other models. The same report says one other Japanese plant will shut down for 10 days in May, and two others will cut the night shift for part of May. Already in March, Nissan paused some of its planned production in the U.S. of the Murano plus the Leaf, Maxima, and Rogue in Smyrna, Tennessee, and of the Altima (pictured) in Canton, Mississippi, Automotive News reported.

Subaru Ascent, Impreza, Legacy, Outback
2021 subaru outback rear
SUBARU

Local Indianapolis news outlet WFYI reported that Subaru’s Lafayette, Indiana, plant shut down during the last two weeks of April, affecting production of 15,000 vehicles. The plant builds the Ascent, Impreza, Legacy, and Outback (pictured).

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