The impact of the lack of cores in cars is expanding.
On March 26, Azera announced that it had decided to suspend production at its Hefei JAC (8.52+2.16%, clinic) plant for five days from March 29 due to a chip shortage.
As a result of this news, Azera’s U.S. shares once fell over 8%. In addition to Azera, Ford, General Motors, Honda, Volkswagen and many other automakers have also suffered the impact of production suspensions due to chip shortages.
Chip shortage exceeds previous forecasts
Azera said the overall supply constraints of semiconductors have affected the company’s production in March 2021. The company expects deliveries to drop to 19,500 units in the first quarter of 2021, compared to previously released estimates of 20,000 to 20,500 units.
On March 27, the person in charge of Azure told China Securities Journal that the chip shortage exceeded previous forecasts and that it is still closely monitoring the industry supply situation and actively coordinating supply chain resources. Production is expected to resume after five working days of shutdown, but the long-term supply situation remains to be seen.
Azure’s temporary production stoppage was not foreshadowed. Previously, during the Q4 2020 earnings call, Azera founder Li Bin said that Azera now has the capacity to produce 10,000 electric vehicles per month, but is currently limited to 7,500 due to global chip shortages and battery supply constraints. Li Bin said at the Time that he expected these resistance to subside by July and that the capacity would be ramped up.
According to the earnings report, for deliveries, 7,225 units of the ES8, EC6 and EC6 were delivered in January 2021 and 5,578 units in February, up 352% and 689%, respectively, year-over-year. As of February 28, 2021, cumulative deliveries of ES8, ES6 and EC6 reached 88,444 units. for the full year 2020, Azera delivered 43,728 units and 20,565 units in 2019.
As a result of the shutdown, Azera will deliver 500 units-1,000 units less than previously estimated.
Brian Johnson, an analyst at investment bank Barclays, said that although Azera executives said during the earnings call that the company has enough chips to meet its production target for the second quarter, demand for chips will still outstrip supply over time.
Several automakers suffer production shutdown crisis
In addition to Azera, several automakers have also been hit by production shutdowns due to chip shortages.
Ford Motor this week halted production at a commercial vehicle plant in Ohio and cut production at a truck plant in Kentucky.
Both GM and Honda automakers said this week that both companies’ plants in North America will remain shut down for the next few weeks.
Meanwhile, Volvo said Tuesday that a chip shortage would have a “material” negative impact on its second-quarter earnings. The company also said that its global production plants will be shut down for several days starting in April.
March 19, chip maker Renesas Electronics factory fire in Japan, part of the production line of in-car chips to stop running, which also led to the global car manufacturers face chip shortages intensified.
Industry insiders said that with the transformation of traditional car companies to the new four, the growing demand for in-car chips, controlling from the engine to the windows, airbags, in-car entertainment and audio-visual systems, ABS systems, lights, and more and more active safety aids. Future automotive demand for chips will further increase, which determines the automotive industry’s high reliance on semiconductor production capacity will continue.
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