Automakers Forced to Adapt to Chip Shortages

Automakers are feeling the pain of a global shortage of semiconductors, forcing companies to halt production of certain vehicles while others are removing some options that rely heavily on chips. Watch below to hear how these automakers are adapting to this shortage.

 

Host: Let’s get over to Tara Patel. She wrote today’s Bloomberg big take about the chip shortage for US and its impact on automakers has been really clear. Tara, is anyone getting away with this better than others? Is anyone getting hit harder than the rest of the group?

Tara Patel: I think that in terms of carmakers, some of them may be coming out and stating, giving, like Ford, some of the more shocking guidance to the market about just how hard they’re going to be hit. But I think all of them are really feeling the pain. Earlier, we heard VW’s CEO yesterday, we were listening to their big rival  talk, the same kind of talk. Assembly lines are being halted. They are doing battle fighting for chips. And they’re in this quarter. It’s the worst that it’s going to be this year, they’re predicting.

Host: So we have a big take, which is a new Bloomberg property that basically delves into something featuring it’s, I think, a fantastic proposition. And today, what the big take is, is a question that we’ve been asking and trying to get to the bottom of, which is if there’s a chip shortage and it keeps on getting worse, why can we just not produce more?

Patel: Well, I think the real answer is that, as in with many crises, is that right now, the damage has already been done. This kind of industry is hugely capital intensive, extremely complicated, highly, highly technical products. And it’s not something that people just decide to invest in, and then they’ll be making their chips next year. Supply chains have deep roots and they’ve been then honed over the decades. And so it’s really just not that simple.

Host: And of course, if this is a longer term problem, automakers can’t just sit and wait for it to fix itself or to get fixed. They have to take action now. So what’s the solution? Is it just focused on more profitable cars? Put your chips into cars that are going to get you a higher margin.

Patel: That’s part of the solution, and that’s what they’re doing. That’s what many automakers have said. We are focusing on the ones, the cars we can make the most money. And they’re also coming up with a little tweaks. Peugeot were saying they’re putting analog speedometers, the old style speedometers, back on a small hatchback model. So that they can save chips for another model. Another another option that is being removed by Nissan and other automakers is built in navigation systems, which use a lot of chips. And this is something that consumers will get a break. A lot of carmakers are saying, OK, if you don’t get the know, the higher tech, you can get a discount on your car. But that also means that that automakers will you know, it might hurt their margins as well.

*Bloomberg contributed to this content

Follow us on social media for the latest updates in B2B!

Twitter – @MarketScale
Facebook – facebook.com/marketscale
LinkedIn – linkedin.com/company/marketscale

 

 

Follow us on social media for the latest updates in B2B!

Image

Latest

AMAG Technology
AMAG Technology: Control, Reliability, and Customer-First Supply Chain Excellence
April 2, 2025

At AMAG Technology, being customer-obsessed goes beyond a mindset—it’s built into every part of the operation. One of the company’s greatest strengths lies in its ability to manufacture its own products, offering a level of supply chain control that few competitors can match. Allan Price, Head of Global Supply Chain at AMAG, emphasizes how this…

Read More
visitor management solution
Reinventing Visitor Management Solution with Symmetry GUEST
April 2, 2025

In an age where speed and security are paramount, the traditional paper logbook is becoming a relic of the past. AMAG Technology’s Symmetry Guest system offers a modern, digital solution that redefines the way organizations welcome and manage visitors. Gone are the days of long lines and confusion at the front desk—Symmetry Guest empowers hosts…

Read More
AMAG
Driven by Customers, Defined by Innovation: Inside AMAG’s Customer-Obsessed Approach
April 2, 2025

AMAG Technology continues to strengthen its customer-obsessed culture by actively listening to both internal and external voices. As shared by Kyle Gordon, Executive Vice President of Global Sales, Marketing, & Commercial Excellence, the company is focused on improving processes, responding with speed, and driving innovation—while honoring its legacy and delivering unique value within the industry.

Read More
biotech
Biotech Moves Smarter: IDDI Powers Data-Driven Drug Innovation
April 2, 2025

As biotech innovation accelerates, small and mid-size pharmaceutical companies are becoming key players in bringing new treatments to market. Yet many of these organizations face steep challenges when navigating clinical trial design, regulatory approval, and data integrity. According to a McKinsey Global Institute report, industries like biotech could help generate up to $50 trillion…

Read More