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Core shortage crisis continues to ferment Honda expects Japanese production to fall sharply by 60% from August to September
Sep 18,2021 16:21CST

The impact of the shortage of semiconductors on the automotive industry is still further fermenting. Japanese carmaker Honda (Honda Motor Co.) said on Friday that its domestic factories are expected to reduce car production by 60% from August to September and by about 30% in early October due to chip shortages and delays in parts shipments caused by the spread of the novel coronavirus epidemic overseas.

Honda said in a statement on its website that its production line operation in japan was about 40% of what it originally planned for the period from august to September. The company expects production to be affected beyond this month and says operating levels in early October will reach about 70 per cent of what was originally planned.

Honda said it was trying to minimise production cuts, but the outlook remained uncertain and the company would continue to assess the impact. The models affected include N-Box, Fit and Odyssey, the statement said. The company announced in August that it had cut its global sales forecast for the current fiscal year by 150000 vehicles from its original plan to 4.85 million vehicles due to a shortage of semiconductors.

Chip shortages have been a lingering nightmare for the auto industry since the second half of last year, which has hit car production to a large extent. The surge in demand for consumer electronics spawned by the epidemic has squeezed the supply of chips in the automotive industry.

In August, Honda suspended production at its plant in Suzuka City, Sanchong Prefecture, for seven days. In September, production was suspended for two to three days at the Suzuki factory and the plant in Shirayama City, Saitama Prefecture. Even when there was no shutdown, the carmaker's Japanese factories, including Shizucho, Saitama Prefecture, reduced production.

In addition, due to the spread of the novel coronavirus epidemic in Southeast Asia, auto parts manufacturers have reduced production, affecting the supply of spare parts and logistics. According to the statistics of the Japan Auto parts Industry Association, Southeast Asia accounts for 30% of the overseas production bases of Japanese auto parts enterprises, with the largest number.

The impact of the shortage of semiconductors has also affected other automakers. Toyota (Toyota Motor Corp.) will cut global production by about 330000 vehicles in October, accounting for 40% of the original production plan. Toyota said on Friday that it would suspend production at 14 Japanese plants for 11 days in October and stop production at 27 of its 28 production lines because of delays in parts procurement.

Subaru also announced on Friday that it would extend the suspension of production at the factories in Ota and Yashima, Gunma prefecture, which began to stop production on Sept. 7 until Sept. 22. Suzuki will stop production at the Hamamatsu plant on September 20.

In a report released Thursday, market research firm IHS Markit expects light vehicle production to fall by 5.02 million, or 6.2%, to 75.8 million in 2021. The agency also cut its forecast for light vehicle production in 2023 by 1.05 million, or 1.1 per cent, to 92 million.


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