Fiat Chrysler Automobiles N.V. joined the list of automakers curtailing vehicle production because of a shortage of computer chips.
FCA officials confirmed to thedetroitbureau.com the company shut down its assembly plant in Brampton, Ontario, while re-opening an assembly plant in Toluca, Mexico, which also had been closed by the shortage of computer chips.
“We are working closely with our global supply chain network to manage any manufacturing impact caused by the global microchip shortage,” FCA said in an email.
“As a result, we have taken the decision to delay the restart of our Toluca, Mexico, plant, which builds the Jeep Compass and schedule down time at our Canadian plant in Brampton, Ontario, which builds the Chrysler 300, Dodge Charger and Dodge Challenger. This will minimize the impact of the current semiconductor shortage while ensuring we maintain production at our other North American plants,” the statement said.
Outside the U.S., FCA was joined by Japanese automaker Subaru, which temporarily suspended production three plants at its Gunma Manufacturing facility due to the semiconductor shortage.
“The impact on the company’s consolidated financial performance is yet to be determined,” the company said in a release. “We will make further announcement(s) if deemed necessary. We apologize for any inconvenience this may cause to our customers and all other stakeholders.”
Ford Motor Co. temporarily shut down its assembly plant in Louisville, Kentucky this week due to shortages of chips that drive everything from infotainment, advanced safety, and powertrain control systems.
Nissan and Honda also have trimmed production in Japan because of the chip shortage while General Motors, Daimler, Volkswagen and Renault have said they could be forced to curtail production.
Emily Kolinski Morris, Ford’s chief economist, said the roots of the crisis can be traced back to the global shutdown of the auto industry. Confronted with the shutdown of the auto industry, chip suppliers, uncertain about when the carmakers would resume building cars again, sold off the chips to makers of consumer electronics.
“There is a global shortage and manufacturers are starting to see that,” she said.
Haig Stoddard, senior analyst for Wards Intelligence, said that the chip shortages could trim anywhere from 15,000 to 20,000 units of the industry’s production schedules in North America.
Manufacturers are likely to make up much of the production later in the year. The one exception is in the truck segment. If a truck plant is out of commission because of chip shortages, it will not be able to reschedule the units. Plants building pickup trucks are running at maximum, making it difficult for manufacturers to make up lost production later in 2021.
Today’s cars often have more computer processing power onboard than a well-equipped home or office. Digital technology is used for the latest touch- and voice-controlled infotainment systems and advanced driver assistance systems using radar, lasers and cameras to avoid accidents. But even the increasingly popular heated, cooled and powered seats need semiconductor chips to operate, as do today’s powertrain controllers. All of these changes are also raising the costs of vehicle coverage as well. New electric vehicles are only accelerating demand at a rapid pace.