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Ford India has halted the production of its cars in the country. Like most manufacturers around the world, the America-based auto giant has also been affected by the shortage of semiconductors supply.
The company manufacturing facilities operating in Chennai and Sanand have been halted due to the current semiconductor situations. According to a report from ET Auto, the facility in Chennai started with a three-day shutdown on January 14 due to the Pongal festival. However, due to the shortage, the company has now extended the shutdown till January 24.
The report also suggested that one of the company's spokesperson reported that the team is currently addressing the serious issue of short supply of semiconductors. He further stated saying the production number from the American automaker will be impacted across Chennai and Sanand plants this entire quarter.
The report further suggests that the short supply of chips could affect the production of Ford vehicles for both domestic and export market by 50 per cent. The company produced around 7,000 vehicles in December 2020. Its cumulative April-December 2020 production was just under 65,000 units.
With vehicles get more modern with connected features, TFT displays, touchscreen infotainments and more, it would need a lot more chips in its production process. The infotainment screen, instrument cluster, ECU and AC controls; among others will require a semiconductor to function.
The problems started when overseas factories making semiconductors were forced to shut down during the pandemic. However, due to people working from their homes, the demand for electronics grew by a substantial margin.
As a result, while the demand increased, the supply decreased for the semiconductor chips. While the processes reached its normalcy, the gap between supply and demand became so large that companies started to suffer from short supply.
Companies manufacturing semiconductor supply their products to a host of companies in the electronics and auto industry. However, the majority of the demand comes from the electronics industry as compared to the automakers.
Adding to the list of woes for automakers, the semiconductor producers prefer electronics manufacturers as their deal size and profit margins are better when compared to the auto industry. As a result, the shortage is prominent for vehicle producers.
According to reports, the short supply of semiconductor chips is most likely to continue until the year 2022 worldwide. This could force automakers around the world including India to cut their production due to the chip shortage.
Thoughts About The Ford India Halts Production Due To Semiconductor Shortage
Semiconductors are something, that has not reached localization in India because of raw materials. The chips are imported from other countries such as Taiwan, China and more. As a result, the short supply of semiconductors in India would take some time to complete, which will in turn continue to plague the automakers. By how much will the waiting period for Ford vehicles increases in the coming months remains to be seen.