As the global microchip shortage drags on, depleted dealership lots are sending some customers into a frenzy.
When one shopper at Burns Chevrolet in Rock Hill, S.C., saw another customer peering into the Tahoe that he wanted to buy, he began shouting at her.
“The woman only wanted to look inside,” said Claude Burns, president of Burns Chevrolet, Burns Cadillac and Burns Ford of York. “And he’s hollering, ‘Get away from that truck. I’m buying it.’ That was uncomfortable for everybody.”
Customer frustration likely will worsen this month as shuttered plants and slowing production lines prevent dealerships from being able to restock.
This week, only four of General Motors’ 14 North America assembly plants are scheduled to be online. One Ford F-150 plant is dark, and the other is operating on only one shift. And Toyota Motor Corp. is in the midst of a production cutback that is expected to cost the automaker 360,000 vehicles of output globally this month, including 80,000 in North America.
The chip shortage that has upended the industry for most of this year is not letting up, as many forecasters and automakers had thought it would in the second half. Instead, the crisis is casting a spotlight on the frailty of the automotive supply chain.
Months ago, some automakers and analysts were optimistic that the industry would normalize by year end. But today, the outlook is less rosy as coronavirus infections climb, especially at parts plants in Southeast Asia. Some chip manufacturers and forecasters say the industry may have to wait until 2022 to refill the pipeline.
Chipmaker Rohm Co., which counts Toyota, Ford Motor Co. and Honda Motor Co. among its customers, expects chips to remain scarce at least through next year, Bloomberg reported last month. Rohm Co. plants have been running at full capacity for a year, but the company doubts it can fill the backlog of orders in 2022.
Forecasting firm LMC Automotive reduced its global light-vehicle sales volume outlook by 2 million vehicles because the industry has lost so much production.
“The one-two punch of inventory shortages and the pandemic are holding back the pace of the global recovery and may lead to permanently lost recovery volume as the effect is expected to last into 2022,” Jeff Schuster, LMC’s president of the Americas operation and global vehicle forecasting, said in a statement.
Continued shift cancellations and downtime at major plants show the severity of the crisis, said Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions.
“It’s not such a big deal when you’re losing Malibu or something else that is going primarily to fleet. But when our bread-and-butter vehicles — full-size pickup trucks — are being hit, then somebody is going to start noticing,” he said.
Many automakers are accustomed to a just-in-time delivery system, which works when they have a contingency plan, he said. But with so few suppliers that make semiconductors for vehicles, those backup plans are lacking.
“It shines a light on the fragility of the supply chain,” Fiorani said. “It behooves you to line up all the suppliers you need.”
Only one new vehicle — a Blazer — remained last week at one of John Hiester’s two Chevy dealerships in North Carolina.
Customers understand there is a shortage, but there’s only so long that some can remain patient, Hiester said.
“If you order a vehicle and you expect to get it in eight weeks … when it’s three or four months out and you still don’t have any resolution, you get to a point where you’re pretty frustrated,” he said.
Hiester’s team can see that vehicles ordered by customers have been built, but many are labeled “MP,” for missing parts, as they await necessary chips. Hiester has begun telling some customers that they may not get their orders until next year.
“We’re trying to give them hope that it’s going to be here,” Hiester said, “and it’s just not coming.”