Chipmakers, who were already facing increased demand thanks to a lockdown-driven boom in games consoles, laptops and televisions, require a lead-time of several months to increase production. In the past few weeks, carmakers including Volkswagen, General Motors, Nissan and Honda have been forced to idle plants or slow production as parts makers struggled to secure supplies from contractors. Ford estimated it could lose up to a fifth of production in the first quarter, as it was forced to cut production of its best-selling F-150 pick-up truck.
Having double suppliers might not be the right strategy, it might be better to have one good supplier than three not so good ones Volvo chief executive Hakan Samuelsson Subaru also cut its vehicle sales target by 4.7 per cent for the fiscal year ending in March, saying the chip shortage will force it to produce 48,000 fewer vehicles in Japan and the US. More than 670,000 fewer cars will be produced in the first quarter of the year as a result of the shortages, according to research by data provider IHS Markit.