We Have Bad News About Subaru Production

COVID-19 / Comments

Chip shortage temporarily closes another plant.

Subaru, having already idled its Yajima plant in the Gunma Prefecture in Japan in April, then reopening it, is closing it down again for the same reason: semiconductor chip shortage. It was shutdown for 13 workdays, at a cost of 10,000 cars that it didn't get to produce in April. It also shutdown its American plant for a spell.

The factory builds vehicles including the Impreza, Crosstrek and Forester, and will go idle on July 16. Its 635,000-square-foot property will only be idled for one day. "It is part of the production adjustment due to shortage of semiconductors," a Subaru spokesperson said.

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Subaru is following many manufacturers in a shutdown as the global chip shortage rages on. If you haven't been reading the news, many of the chip manufacturers shut down during Covid, then reopened soon after. But since consumers weren't buying cars, those companies switched to making chips they could sell, like the ones that go into tablets, video game systems and TV sets. Basically, the stuff we were all using more of over the past 16 months.

Ford just put it's new Bronco back into production after a two-week break. That company has over 125,000 orders for the new off roader and is energized to get it back into production. Some company's have been building cars without the chips, and letting them sit until more come in. And Nissan had to delay it's new Ariya EV for the same reason.

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As long as the shutdown is short, this shouldn't hurt Subaru too badly. It just logged a 9% increase in sales in May, month over month. Its year-to-date sales were also far better (30% up) than the first five months of 2020. It was also the best May ever for WRX and Forester, the latter of which will probably be affected.

We expect the shortages to ease in the next few months as the US plans to invest more than $50 billion into domestic production of semiconductor chips. It also approved a $2 billion investment in older generation semiconductors more often used in auto manufacturing. We're not sure that will help Subaru's output in Japan, but it certainly won't hurt.

Source Credits: Reuters

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