Last week, automakers began to throttle back production of new cars overseas, thanks to a semiconductor shortage. This week, the problem reaches America. Ford and Fiat Chrysler (FCA) have begun idling plants due to a limited supply of microchips.
Ford has announced a week-long pause in production of its Ford Escape and Lincoln Corsair SUVs. FCA has stopped production of its Chrysler 300, Dodge Charger, and Dodge Challenger until the end of January.
Nissan, Honda, and Volkswagen have all dialed back output or revealed plans to do so, of cars sold outside the United States because of chip supply problems.
The problem is a consequence of the coronavirus pandemic. Chip shuttered their factories at times as the virus spread. Meanwhile, millions of people working and attending school from home have bought or upgraded other devices that use the chips, such as more powerful laptops or web cameras. That uses up much of the available chip supply, which automakers need to power the electronic features of today’s new cars.
The shortage is unlikely to affect car prices in the short term. Ford and FCA have ample supply of all of the paused models, so shoppers should still be able to find the combination of colors and features they want for a competitive price on all five. But, should the chip shortage continue to grow, it could drive car prices higher as the supply of available new cars dries up.
