On the other hand, strong demand for profitable trucks and SUVs has been more than helpful.
According to Automotive News, this means investors will be wondering how both companies can navigate a turbulent supply chain.
The annual sales rate for new cars and trucks dropped to 12 million in September, thanks to the chip shortage, and forecasters are cutting their forecasts for 2022 thanks to the shortage and general supply-chain disruption. Much depends on if the chip shortage ends in 2022 or 2023.
Wells Fargo is expecting the two companies will tell investors to focus more on the lower end of their forecasts for the year.
That’s not shocking — the industry is facing a lot of headwinds right now, and Ford and GM aren’t exempt.
[Image: GM]
Become a TTAC insider. Get the latest news, features, TTAC takes, and everything else that gets to the truth about cars first by subscribing to our newsletter.
Related
For GREAT deals on a new or used Nissan check out Mossy Nissan Poway TODAY!
The shortage of microchips continues to drag on, forcing General Motors to idle virtually all of its North American production operations for as long as two weeks — though the automaker could yet extend this latest shutdown.
General Motors is basically shutting down its North American manufacturing operations due to the chip shortage.
GM is just one on a long list that includes virtually every automaker hit by the shortage — and its impact is being felt just about everywhere, from Stuttgart to Detroit to Beijing.
Industry planners hoped to put the shortages behind them by now. Barely a month ago, GM had signaled it had come up with new sources for some of the chips it needed. But that clearly didn’t meet its requirements.
No light at the end of this tunnel
The automaker will either close or extend closures at plants, such as the one in Wentzville, Missouri producing its Chevrolet Colorado and GMC Canyon pickups, another in Canada building the Chevy Equinox SUV, and the Ramos Arizpe facility in Mexico that assembles products like the Chevy Blazer SUV. All four of its North American brands will feel the heat.
Like some of its competitors, the automaker had been partially assembling vehicles, where possible, and then storing them until it could come up with the missing chips and electronic components. So, in some instances, GM will try to take advantage of the upcoming closures. It has secured enough chips, in some cases, to let it “repair and ship unfinished vehicles,” it said in a statement.
GM’s Wentzville plant, which produces its midsize pickups, is on the list to go down.
It was not revealed just how much production GM will lose due to the coming closures but some of those plants routinely produce more than 60 vehicles an hour on two or three shifts, many working overtime — when possible — to help rebuild inventories already drawn down as a result of last year’s pandemic closures.
Empty lots
Company officials indicated GM dealers now have barely half their normal stock of cars, trucks and crossovers which, this time of year, would run between 60- and 70-days’ supply.
Among the dealers TheDetroitBureau.com talked to, some indicated they have less than 10 vehicles in stock and are not sure when they will get more, especially when it comes to popular product lines like the Chevrolet Silverado and GMC Sierra pickups.
And they’re not alone. Toyota has barely 10 days worth of some of its most popular vehicles, like the RAV4 SUV. The automaker last month warned it would cut global production by 40% this month, so shortages could, if possible, get even worse. In recent days, Stellantis, Nissan and Ford, among others, have announced further cuts.
The company is idling its Ramos Arizpe facility in Mexico where it builds the Chevy Blazer.
Consumers paying the price
In turn, customers have been forced to either wait, extend their search or, in many cases, pay at or above sticker price. Some social media reports have highlighted dealer surcharges ranging anywhere from $5,000 to as much as $40,000 above MSRP.
That helped drive average transaction prices to a record of more than $41,000 in July, according to Cox Automotive, J.D. Power and other analysts. The figure is widely expected to have run even higher in August.
Sales for the month came in at an estimated, annualized rate of about 13.1 million, down from as high as 18.5 million earlier in the year.
The Labor Day weekend is normally one of the busier holidays at U.S. dealer showrooms but there is little hope, according to industry insiders, that it will generate anywhere near the normal levels seen in past years.
For GREAT deals on a new or used Chrysler, Dodge, Jeep or RAM check out McPeek CDJR TODAY!
General Motors will resume full-size pickup assembly next week, leaving its crossovers will have to continue enduring production hang-ups related to the semiconductor shortage. American manufacturers have been absolutely creamed by supply shortages this year and a lack of chips really hurt pickup volumes. We’ve seen a lot of creative solutions, including automakers putting unfinished vehicles on the lot in hopes that they can install the missing hardware later.
But GM’s latest solution involves prioritizing Michigan’s Flint Assembly, Indiana’s Fort Wayne Assembly, Silao Assembly in Mexico — all of which were previously idled or operating on reduced schedules. Unfortunately, that means giving other North American facilities more downtime and, sadly, plenty of it.
According to Automotive News, this includes Kansas City’s Fairfax Assembly — which has been idled since February — and five other factories located in North America. The facility was supposed to return to normal at the start of this month, which was later revised for the end of August. However, the newest plan leaves Cadillac XT4 production offline until September 20th, with Chevrolet Malibu assembly now being a giant question mark.
Lansing Grand River Assembly, responsible for the Cadillac CT4 and CT5, has been down since May and just got a two-week extension on its current production leave. Assembly isn’t likely to resume until the very end of August.
San Luis Potosi Assembly has enjoyed more production time than most North American facilities this year. But it’s getting another three weeks of downtime before resuming production of the Chevy Equinox and GMC Terrain. Those models will be back on the assembly line on August 23rd.
That just leaves GM’s Lansing Delta Township, Spring Hill, and Ramos Arizpe facilities — all of which will be getting just one more week off. But we’ve learned not to assume anything in 2021, especially since this is just one of dozens of scheduling changes that had to be revised by automakers. If chip supplies don’t stabilize, we anticipate the manufacturer prioritizing Lansing — so it can get more Chevrolet Traverses and Buick Enclaves on the lot Ramos Arizpe — which builds the Chevy Blazer and Equinox — also has a good chance of getting preferential treatment. Though the whole gang is supposed to be fully operational by August 2nd.
General Motors is just one automaker contending with this industrywide disaster, however. This week saw Mercedes-Benz and BMW also cutting production, citing supply chain problems. Meanwhile, Nissan CEO Makoto Uchida was expressing his pensiveness about the ongoing semiconductor shortage to the media despite his company turning a profit for the first time in a while.
“Knowing the current situation … we cannot be optimistic,” Uchida told CNBCon Wednesday. “I think this is day-by-day still.”
[Image: General Motors]
Become a TTAC insider. Get the latest news, features, TTAC takes, and everything else that gets to the truth about cars first by subscribing to our newsletter here.
