British automobile company Jaguar Land Rover announced the suspension of production at two of its manufacturing plants due to the global semiconductor shortage.
The two factories that will be affected are the Castle Bromwich Assembly in Birmingham, west-central England, and the Halewood Body & Assembly facility just outside of Liverpool in northwestern England. The "limited period" of closure will begin on Monday, April 26.
In a statement, Jaguar Land Rover said:
"Like all other automotive manufacturers, we are currently experiencing some COVID-19 supply chain disruption, including the global availability of semiconductors, which is having an impact on our production schedules and our ability to meet global demand for some of our vehicles.
"As a result, we have adjusted production schedules for certain vehicles which means that our Castle Bromwich and Halewood manufacturing plants will be operating a limited period of non-production from Monday, 26th April."
"We are working closely with affected suppliers to resolve the issues and minimize the impact on customer orders wherever possible."
Castle Bromwich Assembly produces the XE and XF executive luxury cars and the F-Type sports car, while Halewood Body & Assembly manufactures the Range Rover, Evoque and Land Rover Discovery Sport luxury SUVs. (Related: Top selling vehicles are being held back, made without computers as semiconductor shortage sweeps the globe.)
Experts believe that the shutdown will last at least one week, but the company said it will continue to monitor its chip supply before it commits to a reopening date.
Castle Bromwich Assembly employs around 1,900 people, while the Halewood Body & Assembly facility employs about 4,000 workers. Jaguar Land Rover is still considering whether to put the nearly 6,000 affected employees into the United Kingdom's government furlough scheme. This program will pay up to 80 percent of workers' salaries if the reason they are unable to work is related to the Wuhan coronavirus (COVID-19) pandemic.
Jaguar Land Rover's other British plant in Solihull, southeast of the Castle Bromwich Assembly, will remain operational with few changes to its production schedule. The company's international factories in Slovakia, China and Brazil will also continue normal production as the semiconductor shortage has yet to affect them.
Global semiconductor shortage affects entire automobile industry
Jaguar Land Rover is not the only automobile company that has announced changes to its production due to the global chip shortage.
On Wednesday, Chrysler owner Stellantis, which is headquartered in the Netherlands, announced that it would replace the digital speedometers in one of its Peugeot models with more old-fashioned analog ones due to the shortage.
German manufacturer Daimler, known for making Mercedes-Benz luxury vehicles, announced on Thursday, April 22, that 18,500 workers at two of its German plants would work fewer hours to cope with the chip shortage.
South Korea's Hyundai, Japan's Nissan and Honda, Germany's Volkswagen and even the United States' General Motors have also suspended at least some of their production lines at various times in recent weeks due to the shortage.
French carmaker Renault said that the industry was at the peak of its difficulties in securing enough semiconductors. The company further warned that the supply chain disruption could continue for months and last up to the end of summer. Renault said the semiconductor shortage was the main reason its sales in the most recent quarter took a significant hit.
Swedish manufacturer Volvo said on Thursday that it anticipates more risk from the still-unstable semiconductor supply chain.
"The global supply chain for semiconductors as well as for other components remains very unstable and the uncertainty about the development is high," said Volvo Chief Executive Officer Martin Lundstedt. "We maintain our readiness to increase production when possible."
All of the modern cars these automobile companies manufacture contain complex electronics that are heavily reliant on semiconductors. These chips are used in systems such as parking cameras, driver aids, entertainment gadgets and engine management systems.
Chip shortage hit automakers hard due to "just-in-time" manufacturing
The chip shortage began in 2020, when the pandemic led to a surge in demand for electronics like personal computers, laptops, smartphones and gaming consoles. Chipmakers in Taiwan, South Korea and China were taken by surprise by the surge in demand after their sales initially took a beating.
The increase in demand for electronics hit car manufacturers the hardest because they are used to running on lean "just-in-time" supplies rather than stockpiling the necessary parts. This, coupled with car manufacturers having to compete with tech firms has put a significant strain on the industry.
"The automotive industry doesn't count for much in the semiconductors industry," complained one person working for a car manufacturer. This source spoke with The Guardian under the condition of anonymity.
Renault's warnings regarding the continued shortage will most likely be true, as the complex foundries in Taiwan, South Korea, China and other countries where the semiconductors are manufactured are expensive and time-consuming to build.
Taiwan Semiconductor Manufacturing Company, which manufactures around 50 percent of the world's semiconductors, is already investing in new foundries. On Thursday it approved spending an additional $2.9 billion on new manufacturing capacity. However, it will take several months for the company to match its supply with global demand.
Learn all about these modern vehicles that require semiconductors, as well as the global supply shortage that has caused their production to dip, by reading the latest articles at RoboCars.news.
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