Semiconductor shortages

Chips: Who is cashing in?

The semiconductor shortages affecting the automotive sector have hit some OEMs harder than others. So how have the various companies fared?

Bill Rinna, Director Vehicle Forecasts, The Americas

30 June 2021

When word of a semiconductor shortage began to circulate at the end of last year, there were many unknowns, including which automakers in North America would be impacted the most. But as we move beyond the six-month mark, we are getting a much clearer picture of those that have persevered, despite the headwinds, and those that have struggled. 

The reasons for the discrepancies in performance are varied. Certainly, practices and decisions made by individual automakers prior to the shortage are major factors. Strong supply-chain relationships, stockpiling of chips and after-the-fact decisions to decontent vehicles undoubtedly helped those OEMs that have performed better, while those that did not take such steps have had a more challenging time. But we should also factor in sheer bad luck. For instance, the Renesas fire in Japan hit Ford hard, exacerbating an already problematic situation for the automaker.

What is inescapable is that some OEMs have been impacted more than others. Ford appears to have been hurt the most, as shortage-related plant shutdowns left its facilities running at just 55% of their total capacity through May. Ford’s estimated volume loss in the first half of this year is over 50% greater than that recorded by the next manufacturer in line – and the largest in North America – GM. In contrast, Toyota, Tesla, BMW and Daimler have suffered little or no impact on their North American production volumes from the semiconductor shortage, with output running near 80%, or above, through May. In fact, Toyota even hummed along at over 90%.

If we dig a little deeper into the lost volume, there are clear disparities. When looking at volume lost in the high-profit Fullsize Pickup and SUV segments – which include lucrative models like the Ford F-150, Ram 1500, Chevrolet Silverado, GMC Yukon and Ford Expedition – the impact on Ford’s output is far more alarming, with an estimated 37% of the volume losses stemming from those segments, compared with 13% for Stellantis and only 1% for GM.

Not only has the chip shortage constrained automakers’ profits, but the resulting drop in vehicle supply has also impacted their US sales at a time when demand has been particularly robust. Unsurprisingly, given the extent to which the bestselling F-150 Large Pickup has been impacted, Ford has suffered the biggest market share loss in the US, while Toyota and Hyundai Groups have made the largest gains.

The share change is likely to be a short-term phenomenon until supply is back to ideal levels for each automaker. But what should not be underestimated is the cost of losing a (sometimes very loyal) customer, due to lack of inventory, or the effort it will take to win back those disappointed buyers.