Volkswagen and Toyota have become the latest carmakers to warn about production cuts because of the global computer chip shortage.
German car manufacturer Volkswagen said a semiconductor supply crunch could force it to slow production lines during the autumn, adding to cuts that have been in place since February. Japanese firm Toyota also reported that it would slash output by 40% in September.
Carmakers have struggled after a recovery in demand stretched supply chains earlier this year, with Covid-19 outbreaks across Asia hitting chip production and operations at commercial ports.
“We currently expect supply of chips in the third quarter to be very volatile and tight,” said Volkswagen, the second largest carmaker behind Toyota.
“We can’t rule out further changes to production,” the company told Reuters.
The Wolfsburg-based carmaker said it expected the situation would improve by the end of the year, and aimed to make up for production shortfalls in the second half as far as possible.
New car prices have begun to rise in response to the limited supplies of cars, but the most noticeable impact has been on the secondhand car market, where prices have jumped by 14% year on year in the UK and more than 40% in the US.
Toyota said it intended to reduce global production for September by 40% compared with its previous plan, according to the Nikkei business daily. This pushed its shares down by 4.4% on Thursday.
Shares in European carmakers and suppliers were also broadly weaker, with BMW, Daimler, Renault, Volkswagen and Stellantis – the maker of Peugeot and Fiat cars – all down by more than 2%.
The latest production woes follow news that German chipmaker Infineon, the top automotive supplier, was forced to suspend production at one of its plants in Malaysia in June, due to a coronavirus outbreak.
Reinhard Ploss, the Infineon chief executive, said earlier this month that the automotive industry faced “acute supply limitations across the entire value chain” and it would take until well into 2022 for supply and demand to be brought back into balance.
Analysts at ING said some Taiwanese semiconductor companies unaffected by the Delta variant of Covid-19 were pushing production beyond the usual 100% to satisfy demand.
Ford said on Wednesday it would halt output for a week on production lines that build its bestselling F-150 pickup trucks because of the shortage. The shutdown will begin on Monday.
Earlier this month, General Motors suspended production for a week at three North American truck plants, while Nissan halted it for two weeks at a Tennessee plant because of a Covid-19 outbreak at a chip plant in Malaysia.
Phone and computer makers have also reported semiconductor shortages. Apple executives said that while the impact was less severe than feared in the third quarter, it would get worse in the current quarter, and could hit iPhone production.
Editor’s note: An earlier version of this story misstated the restart date for the Lansing Delta Township, Spring Hill and Ramos Arizpe assembly plants.
General Motors will resume full-size pickup production Monday, as planned, after cutting output this week due to the global microchip shortage, the automaker said Wednesday. But six other North American plants will take additional downtime, including Fairfax Assembly, which has been idled for nearly six months.
GM’s pickup plants — Flint Assembly in Michigan, Silao Assembly in Mexico and Fort Wayne Assembly in Indiana — will restart full production Monday. Flint had been operating on only one shift this week, and Fort Wayne and Silao were idled.
The chip shortage has hampered production for GM and other automakers since early this year. GM has prioritized chips for its lucrative full-size pickup and SUV segments over crossovers and sedans. AutoForecast Solutions estimates that the chip crisis has reduced North America vehicle production by 1.8 million vehicles so far. It projects the total impact could reach 2.1 million.
GM scheduled additional downtime at six other plants:
Lansing Delta Township, Spring Hill, Ramos Arizpe assembly plants: Each of the plants will take an additional week of downtime. GM now expects production to restart Aug. 9 after shutting down July 19. Ramos, in Mexico, builds the Chevrolet Blazer and Equinox. Spring Hill, in Tennessee, builds the Cadillac XT5 and XT6 and the GMC Acadia. Lansing Delta Township, in Michigan, builds the Chevy Traverse and the Buick Enclave.
San Luis Potosi Assembly: The plant in Mexico will add three more weeks of downtime and is now scheduled to resume production Aug. 23. The plant has been down since July 19. It builds the Chevy Equinox and GMC Terrain.
Lansing Grand River Assembly: GM plans to resume production at the Michigan plant Aug. 30, two weeks later than planned. Production of the Cadillac CT4 and CT5 sedans at the plant has been down since May 10. Production of the Chevy Camaro, also built at Lansing Grand River, will not be impacted.
Fairfax Assembly: The Kansas City plant will take an additional four weeks of downtime. It was expected to resume production Aug. 23. Now Cadillac XT4 production is scheduled to restart Sept. 20, but Chevrolet Malibu production will remain idled, GM said. Fairfax has been down since Feb. 8.
LINCOLN, Neb. (KOLN) – Nebraska grocers say several products including meats are at alarming prices. Some are higher than they’ve been in several years.
One of the big reasons is transportation costs.
Local grocery stores including Suji’s Indian Grocery are already seeing a 5 to 20 percent price increase on certain products.
The owner, Mahak Singh, said, “Produce is going up and down every week. The beans and rice, they [the wholesalers] are increasing from February until every time you order that.”
Singh said he also pays for the transportation of products, which has gone up an additional 15 to 20%. But, the owner refuses to raise his prices because he said he planned and bought some of his items in bulk this February.
“I got them on a reasonable price before they increased the prices,” Singh said. “I got all the year-round supplies then.”
While Suji’s may not be raising their prices, the Nebraska Grocery Industry Association said other Nebraska stores don’t have a choice.
Executive director Ansley Fellers said, “Grocery stores and the food industry run on really tight margins so it’s only so long that folks can absorb some of those increased prices before consumers start to feel it.”
Fellers said this is why some cuts of meat, including briskets and chicken wings are in very limited supply. The grocery association said the issue behind this is demand for these is very high.
“I think once the supply side catches up to the demand side, everything will even back out,” Fellers said.
Grocery officials said the prices for some products is alarming because it’s the highest it’s been in a long time.
If Mississippians aren’t driving, they are not buying as much gasoline, resulting in a reduction in revenue from the tax on gasoline.
It is too early to see actual data, but it is highly likely that among the many negative impacts of the COVID-19 pandemic, including the tragic loss of life, will be to Mississippi’s highways and bridges.
The primary source of revenue for Mississippi’s Department of Transportation is the state’s 18.4-cent per gallon tax on motor fuels, primarily gasoline.
With the state under a shelter-in-place order, it is logical to assume Mississippians are not driving as much. And if folks are not driving, they are not buying as much gasoline, resulting in a reduction in revenue from the tax on gasoline.
If people are not driving as much, it also could be logical to assume damage is not being done to the state’s infrastructure system. But many argue that the roads and bridges already were in a deteriorated condition that a lack of use cannot fix. Besides, the large semi-trucks that do the most damage thankfully are continuing to travel up and down the roads, delivering much needed supplies, such as food and presumably toilet tissue, though, it is often hard to prove toilet paper has been delivered by looking at the store shelves.
The gasoline tax generated $305.5 million in revenue for the Department of Transportation during the past 2019 fiscal year. Collections from the motor fuel tax for the current 2020 fiscal year were slightly outpacing last year’s collections before COVID-19 ground much of the activity in the state to a halt. It is safe to assume that until the coronavirus is contained that travel will be diminished.
It should not be a surprise that COVID-19 is impacting the transportation system just as it is tragically impacting nearly every aspect of life.
“Like all of us, the Mississippi Department of Transportation is facing uncertainty due to the COVID-19 pandemic,” said Melinda McGrath, executive director of the agency. “With residents sheltering in place to slow the spread, there is less demand for fuel. As a result, we anticipate fuel tax receipts to be decreased in the coming months. However, ongoing highway projects will continue as planned, and MDOT will continue to make efficient use of the resources available.”
For about a decade there have been ongoing debates on how to provide additional funds for transportation – on both the state and local levels. On the state level, the Department of Transportation has said it needs an additional $400 million annually to keep up with repair and maintenance needs.
A recent report said the state has about 30,000 miles of highway and that about 11,000 are in need of repair and the state has about 5,700 bridges with about 900 under restrictions that hinder commercial traffic.
The 18.4-cent per gallon gasoline tax is the nation’s third lowest.
Before the pandemic hit, Transportation Department officials said the tax was generating essentially the same amount