As computer chips are reserved for the best sellers.
Nissan is the latest auto manufacturer to feel the crunch of the computer chip shortage that's been raging for months. The company will temporarily shut down the production of three models for four extra weeks after the usual two-week shutdown this summer. The vehicles affected are the Murano crossover, Leaf EV and Maxima sedan, according to Automotive News.
America has a plan to ease the chip shortage. A new bill has been approved by the US Senate to invest more than $50 billion into domestic production of semiconductor chips, as well as a $2 billion investment in older generation semiconductors used in auto manufacturing. It also pushes federal government agencies to purchase American-made products in contracts.
The company is currently in the midst of a product overhaul, with new SUVs like the Pathfinder hitting the ground, as well as a new Frontier pickup and recently-teased Infiniti QX60. Currently, Nissan's big sellers like the Sentra, Rogue and Kicks are getting all of the chips. "It's a bit of a Rubik's Cube," said Michael Colleran, Nissan brand's US sales and marketing boss to AN.
"It's required us to be on our toes on a day-to-day basis and work every day to understand what the supply chain looks like, what our suppliers can provide us," Colleran said last month. "We meet daily and talk about how we allocate the chips to the components, ensuring that we're protecting our launches, that we're living up to the contractual commitments that need to be satisfied," such as rental fleets.
The reasons for the chip shortage are manifold, but the main one is the Covid pandemic. As OEMs shut down, they cancelled a lot of orders from their supply chains. So, suppliers found other markets that were doing well, such as home-based devices like TVs, tablets and game systems, as well as cloud computing services like Amazon, Microsoft and Alibaba.
Compounding that even further is the fact that Chinese tech makers like Huawei couldn't buy chips after a certain time due to trade sanctions, so they placed big orders early. Automakers are the last in line, and some analysts are saying the shortage in the industry could last well into next year.
Last month Nissan Chief Executive Makoto Uchida said, "the impact we foresee as of speaking is about 500,000 units in terms of the production this year." We noted then that Nissan moved 1.2 million vehicles in 2019, so that shortage would equal a little less than half of its total output.
Nissan sold just over 225K Rogues and just under 138K Altimas in the pandemic-hampered 2020, so we expect whatever chips Nissan acquires in the near term will be going towards those mass-market winners.