Vehicle manufacturers, on edge due to chip shortages, do not meet their production goals

First modification: 10/21/2022 – 18:51

If before the pandemic a vehicle in Colombia lost value just by leaving the dealership, today the trend is totally opposite: the lucky buyer will have an asset that appreciates as days go by.

“To give an idea, in the pre-pandemic era, before 2019, for every new vehicle that entered the market, three used ones moved in the chain and today between seven and eight are moving,” Eduardo Visbal Rey explained to France 24. , Vice President of Foreign Trade of the National Federation of Merchants of Colombia.

This phenomenon is not free, nor is it the responsibility of the South American country alone: ​​the global shortage of semiconductors has made the industry unable to meet the growing demand for new vehicles, exacerbating the appetite for used ones.

The world’s big manufacturers, which have just closed a disappointing quarter in terms of growth, have already begun to reduce their bets, fading the ambitious production goals set at the beginning of the year.

Japan’s Toyota Motor, the world’s largest by sales volume, acknowledged this Friday, October 21, that its annual vehicle production is likely to be below its initial target.

For the current fiscal year, which began in April and ends in March 2023, the company projected to reach a record 9.7 million vehicles. Production for October and November will be below the average monthly plan of 900,000.

“Vehicles have very important components of a technological nature without which they cannot operate. This production has been delayed because suppliers are preferring to sell them to cell phone factories and high-tech items, surely for economic reasons,” added the union executive. .

Demand, still strong, threatens to fade

Although car production remains limited overall due to chip shortages, rising inflation, high interest rates and growing risks of economic downturn in major markets have dimmed the outlook for demand that has held up. strong.

Tesla Chief Executive Elon Musk said earlier this week that “a kind of recession” in China and Europe was weighing on demand for its electric cars.

In the nine months to September, the luxury carmaker nearly tripled its profits from the same period a year earlier. However, in terms of revenue, it disappointed the market.

At the beginning of this year, the star asset of the richest man in the world predicted that he would increase his sales by 50%, but so far he has not done so at the rate he projected.

The financial vice president of Renault, Thierry Piéton, assured this Friday in a conference with investors that not only the shortage of chips is affecting the industry, but also the lack of other raw materials such as lithium.

In that sense, “a significant peak in the prices of raw materials is expected in the second half.” The executive acknowledged that the inventory level of its dealers is still very low.

In his own words, which could well summarize the situation of the entire industry: “We are still clearly in a situation of demand that greatly exceeds supply.”

With Reuters and AP