Sunday, February 28, 2021
News Chip Shortages May Heavily Impact New Vehicle Outputs

Chip Shortages May Heavily Impact New Vehicle Outputs

2020 suffered strong highs and deeps lows and while 2021 started strongly, the international microchip shortage may put a serious damper on momentum

  • Nearly manufacturers will be affected by the chip shortfall.

  • This shortage may create peaks and valleys in deliveries in 2021.

  • This is an ongoing issue that began late last year and could last through the first half of 2021.

Nearly all mass-production automakers have, are, or will face issues due to severe microchip shortages. General Motors, Mazda, Volkswagen, Subaru, and Volvo, to name only these three, are in the midst of dealing with the consequences of chip manufacturers scaling back output and shifting production away from automotive last year.

Across the Globe, the shortage has forced automakers to slow or idle certain assembly lines. The chips are used in digital displays and operate safety systems. They are also used in smartphones and video game consoles. The concern is that new car demand could outpace availability due to automakers cutting down on production.

2021 Chevrolet Equinox | Photo: Chevrolet

For example, GM’s production of the Chevrolet Malibu sedan, Equinox and Trax, as well as the Cadillac XT4 SUV, and others could be cut by up to 10,000 units next week alone.

While most automakers are focusing on their more profitable products, Ford has said that they will be forced to curtail F-150 production and drop two of the three shifts at one of the plants that build the truck. The other one will keep two shifts going. Essentially, 50% of F-150 output will be cut for a week starting next Monday.

What this scenario could bring is additional pressure on new and used car pricing. Wiggle room will be extremely limited due to tightening inventories. This will also have an impact on used car prices, which have already escalated substantially in the last year as reported by Automotive News. These sharp increases in pricing could mean that fewer consumers will be able to afford a new or used set of wheels this year.

Not all is gloomy however as there’s overall optimism thanks to the arrival of the COVID-19 vaccines and that the economy remains relatively strong.

Trending Now

Lucid Motors To Go Public With $24 Billion Valuation

A merger with a financier has boosted Lucid’s value. The Lucid Air arrives in the second half of 2021. We’ve reported many times on...

Rolls-Royce Phantom Tempus Turns Time Into an (Expensive) Illusion

Starlight Headliner upgraded with Pulsar roof and doors Timeless Roller Limited to just 20 units Rolls-Royce is once again doing what it does best....

2021 Mitsubishi Outlander PHEV Gets Revised Powertrain, Increased Range

The 2021 Mitsubishi Outlander PHEV starts at $36,295 in the U.S. and at $44,198 in Canada, freight and delivery charges excluded. New 2.4L...

Toyota Gives New Vehicle to FJ Cruiser Driver Turned Hero in Massive Texas Pileup

Paramedic's vehicle trashed in pileup, driver helped others before himself Other arriving first responders unaware driver was victim in crash A Texas paramedic went...

Lordstown Shows Off Baja-Ready Endurance Race Truck

Truck set to make racing debut April 21 No word yet on how Lordstown will deal with long distance race Electric startup Lordstown Motors...
Matt St-Pierre
Matt St-Pierre
Trained as an Automotive Technician, Matt has two decades of automotive journalism under his belt. He’s done TV, radio, print and this thing called the internet. He’s an avid collector of many 4-wheeled things, all of them under 1,500 kg, holds a recently expired racing license and is a father of two. Life is beautiful. Send Matt an emai


Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.