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DETROIT (AP) – The global shortage of computer chips is getting worse, forcing automakers to temporarily close factories, including those that make popular pickup trucks.
General Motors announced on Thursday that it will halt production at eight North American sites over the next two weeks, including two that make the company’s best-selling Chevrolet Silverado pickup truck.
Ford will stop picking up at the Kansas City Assembly Plant for the next two weeks. Shifts will be cut at two more truck factories in Dearborn, Michigan and Louisville, Kentucky.
The cuts will increase the already understaffed supply of cars, trucks and SUVs at dealerships nationwide, driving prices to record highs. Automakers reported that US dealers had just under a million new vehicles in their lot in August; this is 72% lower than 3.58 million in August 2019.
“It now seems to be accelerating in the wrong direction,” said Jeff Schuster, head of global vehicle forecasting at LMC Automotive, a consulting firm.
Industry analysts say the delta variant of the novel coronavirus has hit workers at chip factories in southeast Asia hard, forcing some factories to close. This exacerbated the chip shortage, which began to improve in the early summer.
“New sales prospects for the remainder of the year now continue to wane with the fact that tight inventory will hold up through 2022,” said Kevin Roberts, Cargurus.com’s director of industry insights.
Demand for trucks, SUVs and other cars is strong, but buyers are becoming increasingly frustrated by the lack of stock and high prices. According to JD Power, US light vehicle sales fell nearly 18% in August from a year ago, with the average vehicle selling price breaking a record above $41,000.
Sales of Ford’s F-Series trucks fell nearly 23% during the month.
The decline in August sales and stock shortages caused Schuster to cut its US sales forecast for the year to 15.7 million. Until the pandemic hit, sales were around 17 million per year.
Schuster said consumers who need a new vehicle don’t have much choice because dealer supplies are so short. Some left the market because they couldn’t find something that met their needs. For others, “pricing is skyrocketing so they can’t afford it and aren’t willing to spend what it would cost to get that car.”
GM is closing its pickup factories in Fort Wayne, Indiana and Silao, Mexico for a week starting Monday. A factory in Wentzville, Missouri that manufactures midsize pickup trucks and large pickup trucks, will close for two weeks. Other plants producing small and medium SUVs will be idle for two weeks or more.
“These latest timing adjustments are driven by the continued shortage of parts caused by the semiconductor supply restrictions from international markets experiencing COVID-19 related restrictions,” GM said in a statement.
The GM and Ford cuts come on top of temporary factory closures previously announced by Toyota, Nissan and Stellantis (formerly Fiat Chrysler).
Stellantis closed its Ram truck assembly plant in Sterling Heights, Michigan this week due to a chip shortage. The company’s small SUV plant in Belvidere, Illinois, and a minivan plant in Windsor, Ontario were out of service for two weeks.
Toyota said it will cut production in Japan and North America by at least 40% over the next two months, and cut 360,000 vehicles worldwide in September alone.
Announcing in mid-August that a shortage of chips had forced it to shut its large factory in Smyrna, Tennessee, for two weeks until August 30, Nissan now says the shutdown will take four weeks until September 13.
There is some good news. Ford said its overall production rose 76% from July to August, but it’s unclear how long that will last.
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