Ford India shuts Chennai plant due to global semiconductor shortage

Ford joins Nissan, Volkswagen, Fiat Chrysler and Toyota globally, who have curtailed production due to a global semiconductor shortage.
Ford logo
Ford logo
Written by:

Ford India has shut its plants due to a global semiconductor shortage affecting the automobile industry. In a statement to TNM, Ford said it will resume production from January 24 onwards. 

“We pulled ahead a down week at Chennai Plant to this week as a global semiconductor shortage disrupted part supplies from our vendors. We will resume production at the Chennai plant next week,” Ford India said.

Ford has two plants in India — one in Chennai and one in Gujarat, and expects the issue affecting the sector to continue for at least the first half of 2021. 

Ford has joined Nissan, Volkswagen, Fiat Chrysler and Toyota globally, who have curtailed production amid a global semiconductor shortage, delaying the production of some vehicles.

The widening global shortage of semiconductors for auto parts has forced major auto companies to either completely stop or slow down the pace of production. 

Ford India exports a significant portion of vehicles produced from its two plants. In December 2020, its production was down 42.96% at 6,943 units.

The company's domestic sales were at 1,662 units, down 45.06% from the year-ago month, whereas its exports were at 6,992 units, a decline of 53.83% from December 2019.

In the April-December period of the ongoing fiscal, the company's production stood at 64,867 units, down 55.87% from the same period last year.

Last month, due to the semiconductor shortage issue supplied by Bosch Ltd, homegrown auto major Mahindra & Mahindra had also stated it was expecting reduction in production and sales volume at its automotive division and in its wholly-owned subsidiary in the last quarter of the current fiscal. Bosch Ltd, a major supplier, had stated that its imports of micro-processors (semiconductors) have been hit following a global surge in demand from the consumer electronics industry.

At that time, auto components industry body ACMA had said it was still not clear as to what extent and for how long the shortage of semiconductors will impact vehicle production in India.

Prior to India, Ford had said it will idle its plant in Kentucky for a week. Nissan has said it will reduce production at one of its plants in Japan, which makes the Note, a car not sold in the US.

Volkswagen, Fiat Chrysler, and Toyota also have reported problems with semiconductor supply chains, with Fiat Chrysler temporarily shuttering factories in Canada and Mexico.

The auto industry is using more semiconductors than ever before in new vehicles with electronic features such as Bluetooth connectivity and driver assist, navigation and hybrid electric systems.

Chip shortages also forced Apple to push back the rollout of its latest line-up of iPhones until early November.

The global semiconductor market is expected to be worth about $129 billion in 2025, nearly triple its size in 2019, according to the research firm Mordor Intelligence.

Research firm Gartner also revised its forecast for the global semiconductor market, saying the overall revenue in the semiconductor market will come to $415.4 billion in 2020, down $55 billion from its original forecast.

With inputs from agencies

Related Stories

No stories found.
The News Minute
www.thenewsminute.com