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The U.S. auto industry is recovering, calling on the government to solve the 'core shortage' problem

by:Yisheng      2021-06-07

'The automotive retail market has fully recovered in March. A few months ago, I couldn't imagine myself saying that.' Cox Motors Chief Economist Jonathan Smok said in an interview that the next few months In the next few months, we may see a more serious shortage of inventory than the current one.


   The American Association of Automobile Manufacturers warned that the global semiconductor supply shortage may lead to a reduction of 1.28 million vehicles in the United States for the entire year, and will suspend production in the next six months, calling on the government to help solve this problem. John Bozera, CEO of the Automotive Innovation Alliance, pointed out that 'some funds should be used to build new production capacity to support the automotive industry and reduce the risks of the current chip shortage for the automotive supply chain.'


Economic Daily News-China Economic Net Comprehensive Foreign News Report The US auto industry has begun to recover from the epidemic, and sales in March hit the highest level in more than 20 years. J.D. Power data shows that in the first quarter of this year, US auto retail sales increased by 26%, and light vehicle sales increased by 12% year-on-year.





'The automotive retail market has fully recovered in March. A few months ago, I couldn't imagine myself saying that.' Cox Automotive chief economist Jonathan Smok ( Jonathan Smoke said in an interview that in the next few months, we may see a more serious shortage of inventory than the current one.


Currently, automakers are working hard to shift their limited supply of microchips to the most important and fastest models. It is understood that some auto companies have begun to manufacture cars in advance without chips. They park incomplete vehicles in a corner of the factory until enough chips arrive.


Volkswagen America CEO Scott Keogh said: “The main theme of the US auto market this year will be inventory, production and supply.” Cox Motors’ data shows that since mid-March , U.S. auto inventories have fallen by 20,000 vehicles, reaching their lowest point since mid-January, and inventories across the industry have fallen 21% from a year ago.


'If the chip shortage is controlled in the second quarter, we can still recover a large amount of potential production. But if this situation continues into the third quarter, then part of the transaction volume will not be able to recover, which will be New car sales bring greater downward pressure.” CarGurus Director of Industry Observation and Analysis Kevin Roberts (Kevin Roberts) said.


The American Association of Automobile Manufacturers warned that the global semiconductor supply shortage may lead to a reduction of 1.28 million vehicles in the United States for the entire year, and will suspend production in the next six months, calling on the government to help solve this problem.


In its written response to the government’s review, the Alliance for Auto Innovation stated that the U.S. Department of Commerce should allocate some funds in a proposal to expand semiconductor production to meet the needs of the automotive industry . The organization represents almost all automakers with factories in the United States, including General Motors, Ford, Volkswagen, Toyota, and Hyundai Motor Company.


In February of this year, the US government ordered several federal agencies to take action to resolve the chip crisis and seek $37 billion in funding to promote legislation for the US chip manufacturing industry.


John Bozzella, CEO of the Automotive Innovation Alliance, pointed out that “some funds should be used to build new production capacity to support the automotive industry and alleviate the current shortage of chips for the automotive supply chain. risks of'. The organization also stated that the U.S. government can assign a specific percentage based on a reasonable allocation of expected demand from the automotive industry to support facilities that produce automotive-grade chips. '


The global chip shortage has hit car manufacturers particularly hard. During the COVID-19 pandemic, many manufacturers cancelled orders for chips due to the shutdown of car factories. However, when automakers were about to restart production, they found that chip makers were busy fulfilling orders in the consumer electronics industry, because the demand for high-end electronic equipment surged as people's home time grew.


It is worth mentioning that most automakers have been hit by chip shortages. Recent announcements show that Ford will cut the production of seven assembly plants in North America; Kia will also cut production in Georgia for two days; Some popular GM models have also been discontinued.

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