Chip Shortage Forces Automakers To Cut To The Bone

Jul 19, 2022 2 min read
Chip Shortage Forces Automakers To Cut To The Bone

Relief doesn’t seem to be coming anytime soon…

Opinions about why there’s a global chip shortage, which has absolutely wracked the automotive industry, run the range. Whatever is driving the problem, it seems like every time we check in on the situation it’s gotten worse, not better.

Watch the latest Motorious Podcast here.

Per Automotive News, car sales through June plummeted 18%, shattering projections by analysts. Cited as one of the top reasons for poor performance in the auto industry is of course the chip shortage, casting doubt on what the future might hold.

A report from Fox Business highlights how automakers are still cutting back on features to make what chips they have stretch. Before, we saw luxury items like multi-way power-adjustable seats and digital gauge clusters axed. With the crisis lingering, now blind spot monitoring and other safety systems not required by government regulators are being ditched for some model lines.

While some might fear the fallout from such moves, others argue the many safety systems in modern vehicles are at least in part at fault for increasing on-road fatalities. In other words, that might be the silver lining to this difficult situation.

Another report from Automotive News says over 100,000 vehicles were cut from the production schedules of factories in North America last week. That’s a lot of cars, trucks, and SUVs consumers no doubt would want and which could help drive down the cost of new vehicles. Many shoppers are finding themselves priced out of the model they really wanted, if not the new car market entirely. The production cut estimate was provided by AutoForecast Solutions.

There are some solutions in the works, although only time will tell how much relief they’ll provide. Several chip installations are under construction in multiple areas of the United States, a topic we’ve covered before. Australian auto site Wheels says Bosch is moving to boost chip production in Europe, investing €3 billion not only for increased manufacturing but also new testing centers and chip research.

Sources: Automotive News, Fox Business, Wheels, Automotive News

Photos via Intel, Ford, Tesla

Great! Next, complete checkout for full access to Motorious.
Welcome back! You've successfully signed in.
You've successfully subscribed to Motorious.
Success! Your account is fully activated, you now have access to all content.
Success! Your billing info has been updated.
Your billing was not updated.