GM, Ford See Semiconductor Shortage Lasting Into 2022
Muhammad Irfan 1 month ago Thu 28th October 2021 | 09:20 AM
New York, (UrduPoint / Pakistan Point News - 28th Oct, 2021 ) :General Motors and Ford reported lower profits Wednesday as a global semiconductor crunch dented sales, prompting both US auto giants to caution that shortages would persist into 2022.
The latter Detroit automaker suffered significant sales declines across its markets including the United States and China, the result of depleted inventories due to the chip shortage that obliged plants to suspend manufacturing.
Ford also reported lower profits, but revenues fell more modestly and the company pointed to a "significant" improvement in semiconductor availability in the latest quarter Chip availability "markedly improved" from the prior quarter, even as supply "remains a challenge," Ford said in their earnings release.
"We see it continuing into 2022," Ford Chief Financial Officer John Lawler said on an analyst conference call, adding that the problem could persist into 2023.
Still, profits topped analyst expectations, in large part because of strong vehicle pricing due to limited inventories. US dealer inventories are currently less than a third of their year-ago levels.
Barra said the company has seen "some improvement" in semiconductor availability, with more expected in the first quarter of 2022, although the situation "continues to be somewhat volatile." In the first half of 2022, "We'll still see impact from the semiconductor shortage," she said, but "we think it will get better towards the end of the year." car inventories are also expected to stay lean into 2022, but will rebuild over the medium-term.
"We're meant to have more inventory," said Chief Financial Officer Paul Jacobson. "When customers want to buy a vehicle, they want to buy a vehicle. They don't want to wait." But GM is rethinking its approach to inventories in light of the strong pricing of the pandemic.
"The right answer is certainly a lot more than what we have today but certainly quite a bit less than what we've carried historically," Jacobson said.
But the auto giant said it enjoyed a "significant" improvement in semiconductor availability compared with the prior quarter. In April, Ford had cited a fire at a Japan chip supplier as a major obstacle.
Like General Motors and other rivals, Ford is aggressively ramping up investments in electric vehicles. The company has unveiled an all-electric version of its popular F-150 pickup truck and plans a new F-Series truck plant in Tennessee.