Since the chip shortage began, automakers have pledged to use the available chips to continue building their most popular vehicles. But now, Ford (F) and Stellantis is having trouble delivering completed collections to its dealers.
“They tried very hard to allocate the chips they get to high-demand, high-margin vehicles,” said Michelle Krebs, senior analyst at AutoTrader. “But clearly that is the challenge now.”
Ford announced that it has started building the country’s best-selling vehicle, the F-150 pickup, without some of the chips it needs. He will park the unfinished trucks while they wait for the lost chips to arrive, instead of sending them to dealerships.
The company also temporarily closed one of three shifts at the Kentucky Truck plant where the Expedition and Navigator SUVs are built, as well as the Super Duty pickup trucks.
Stellantis, an automaker formed by the merger of Fiat Chrysler with the French PSA Group, is doing the same with the Ram 1500 Classic pickup, a basic version of this truck.
The good news for Stellantis is that sales of the Ram pickup may not drop, or at least not immediately. Krebs said Stellantis has a surplus stock of the Ram 1500 Classic – worth around 143 days. This compares to an average supply of 59 days for large collectors across the industry.
The global chip shortage
The chip shortage has hurt automakers worldwide. Automakers cut back on orders for computer chips early last year, when the pandemic caused temporary plant closures and slowed auto sales and production. Electronics makers, who had strong sales during the pandemic, happily snapped up the oversupply.
But when car sales recovered earlier than expected, it left the industry battling chip shortages.
The average car has between 50 and 150 chips. Some chips can be used in several models, which has allowed automakers to maintain the production of trucks and SUVs so far. But there are other chips specific to each type of vehicle.
General Motors and Ford have warned investors that the chip shortage will reduce their earnings in 2021 by more than a billion dollars.
Krebs said automakers are also facing problems because of delays at the country’s ports, which is preventing container ships from unloading shipments of automotive parts. These problems, taken together, may limit car sales in the United States, she said.
“The supply chain is very fragile,” she said. “We have a conservative sales forecast due to tight inventories.”
GM (GM) has kept three factories in North America closed since the beginning of February, and the automaker said they will remain closed at least until next month. These factories do not build full-size pickups or SUVs, but the shortage of chips has prompted GM to tinker with its wide range of vehicles as well.
Last week, GM confirmed that it would build some versions of the Chevrolet Silverado and GMC Sierra without a fuel management module that improves mileage by about 1 mile per gallon. The chips cannot be added to the trucks after the fact, so they will be sent to dealerships without the chips.
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