Stellantis, Nissan, Nio cut more production due to chip shortage

WASHINGTON (Reuters) – Stellantis NV and Chinese electric vehicle maker Nio became the latest automakers to announce further production cuts as a result of a global shortage of semiconductor chips.

Stellantis said on Friday it will temporarily halt production at five North American plants next week due to global microchip shortages: two assembly plants in Canada, one in Mexico and two in the United States. The production stops will begin next week until the beginning and mid-April.

The affected plants are the company’s facilities in Toluca, Mexico, where it produces the Jeep Compass; Windsor Assembly in Ontario, where it makes Chrysler Pacifica minivans; a plant in Illinois that makes the Jeep Cherokee SUV; a Michigan plant that makes the Ram 1500 Classic pickup and another Ontario plant that makes the Chrysler 300, Dodge Charger and Dodge Challenger.

Stellantis did not specify how long the shutdowns would last, but a local union in Windsor said the minivan plant would halt production for four weeks starting Monday.

Nissan Motor Co said on Friday it will halt production for two days starting April 1 at its Smyrna and Canton Vehicle assembly plants and at the Aguascalientes plant in Mexico. Normal production will resume on April 6.

Nio, one of the main challenges for Tesla, which dominates the electric vehicle (EV) market in China, said it would halt production for five business days at its Hefei plant and cut its first-quarter delivery forecast by up to 1,000. vehicles.

Shares of Nio, which makes the ES8 and ES6 electric sport utility vehicles, ended the day down 4.8% on the New York Stock Exchange.

Ford Motor, Honda Motor, General Motors and Volkswagen were among the automakers surprised by the shortages, forcing many to contain production even as demand for cars increased during the pandemic.

The chip shortage has cost the global auto industry 130,000 vehicles in lost production, estimates research firm AutoForecast Solutions, with the biggest impact in North America, with 74,000 units lost, and Western Europe, with 35,000 lost.

The chip shortage is also the result of increased demand from the consumer electronics industry, as people worked from home and played more video games during the crisis. Sanctions against Chinese tech companies have also played a role.

Nio, which also faces competition from local rivals such as Xpeng Inc, now expects to deliver 19,500 vehicles in the first quarter, down from the previous 20,000 to 20,500 range.

Ford had warned that the shortage could affect its 2021 earnings by as much as $ 2.5 billion, while US automaker GM expects the crisis to cut as much as $ 2 billion from its full-year earnings.

Ford, which had so far assembled its highly profitable F-150 without certain parts, said Thursday it would halt production of the trucks at a Michigan plant until Sunday.

GM and Japan’s Honda said this week that they would continue to suspend production at North American plants for the next several weeks.

Meanwhile, Swedish truck maker Volvo AB said Tuesday that the chip shortage would have a “substantial” impact on its second-quarter earnings and that it would implement downtime at its sites globally starting in April.

(Reporting by David Shepardson in Washington, Sarah Morland in Gdansk, Josh Horwitz in Shanghai, Ankit Ajmera in Bengaluru, and Paul Lienert in Detroit; Edited by Peter Graff, Arun Koyyur, Alexander Smith, and Jonathan Oatis)

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