The global semiconductor shortage has been particularly hard on Western automakers, though it’s not been peaches and cream for Asian brands. Following news that Nissan had run into issues resulting in additional downtime this summer, we’ve learned that Subaru is currently operating with a scant, nine-day supply of product and will be required to conduct more plant closures due to a lack of chips.
Having already stalled its Yajima plant on multiple occasions, as well enacting work stoppages at Subaru of Indiana Automotive (its U.S. facility), this is hardly where the brand wanted to find itself going into the warmer months. On Friday, Subaru announced it would be idling two plants in Japan’s Gunma prefecture this July.
That means Yajima is going down for a third time on July 16th, along with the repurposed Ōta facility that used to build kei cars for the Asian market. Ōta is now responsible for BRZ/Toyota 86, while Yajima handles basically every other passenger vehicle the company makes. Subaru has not confirmed how long the idle period would last, though identified the problem as a supply issue pertaining to semiconductor chips.
The good news is that this doesn’t appear to have impacted other factories, with its engine/transmission facility and commercial vehicle plant both remaining active (for now). Still, it was looking at an incredibly thin nine-day supply of vehicles at the end of May and appears to be going into the summer production schedule in less than stellar shape. It might soon become incredibly difficult to find a new Subaru, let alone one configured to your tastes.
The company said it would need to revise production estimates due to the supply issue, according to Reuters. Part of that will undoubtedly be deciding which markets receive preferential treatment. The Gunma plants export globally and it’s unlikely that every nation is going to see their usual allotment of cars. Some regions might see massive shortfalls to be made up later, though it’s likely impossible that any singular market will avoid the associated pricing increases.
That problem is hardly unique to Subaru or the automotive industry in general, however.
[Image: Subaru]
I wonder how close Japan is to setting up the proper assembly line to mitigate the issue?
One simple change is to replace electronic parking brake with a mechanical handle.
But generally, Japan has little to worry about. Their birth rate is 1.36 and 40% population 55+. See what I am talking about? They will soon have too many facilities for the shrinking JDM. Add to this highest suicide rate of all countries…
The robots are coming.
“The robots are coming.”
Have you read R.U.R. ?
What is R.U.R.?
How many Outbacks do robots buy?
“What is R.U.R.?”
I thought, you told me before that you’re specialist in Eastern Europe.
Ok, RUR – Rossum Universal Robots. This is where word “Robot” came from. Robot is actually a slavic word. Robota = work. Karel Chapek 1920. Extremely interesting in the context of today’s America.
Uh no, not a specialist in Eastern Europe.
Subaru has expanded to Japan now? Good for them [I love a good American success story].
https://www.subaru.com/about-subaru/our-company
I remember the US fighting the Cold War (USSR).
Then, the US fighting over oil (Iran & Iraq) and the Gulf war.
Now, we’re fighting over integrated chips and rare earth metals (China).
What’s next??
We give away energy independence and chip manufacturing all to placate environmental silliness. So now we depend on places like Iran and Russia for oil and China for chips.
Try opening a chip plant in the United States in this day and age. And we haven’t built a new oil refinery since the 1970s.
Progress!!!
Crosley
You are a wise man.
On the Ohio River near Beaver PA they have been building what is belive is a new oil refinery for several years. Have not been by there (my old neighborhood) in a couple of years. It may be complete for all I know. Shocking anything like this does get built with all the man made global warming scammers running the government, hollyweird and most media.
The Shell ethylene cracker plant in Beaver County is still under construction and expected to be done in 2022. Shell may not be rushing, as the economics of the plant are apparently not as good as they were when they planned it. Meaning it may be yet another brownfield before long (but it already was, so not too bad overall).
https://en.wikipedia.org/wiki/Shell_Pennsylvania_Petrochemicals_Complex
“So now we depend on places like Iran and Russia for oil”
What are you talking about?
“The United States became a net annual petroleum exporter in 2020. In 2020, the United States exported about 8.51 MMb/d and imported about 7.86 MMb/d of petroleum1, making the United States a net annual petroleum exporter for the first time since at least 1949.”
https://www.eia.gov/energyexplained/oil-and-petroleum-products/imports-and-exports.php
“We give away energy independence”
Ummm….. nope.
Dependence means needing an other country’s oil. Leaving one’s own oil in the ground for future use is part and parcel of maintaining a “strategic reserve”. The military is a massive consumer of fuel. China for example does not have enough oil for it’s own consumption. If the USA consumes all of their oil reserves in the name of “independence” it is then at a disadvantage if/when a war breaks out in the future.
“And we haven’t built a new oil refinery since the 1970s.”
The USA does not need to build more refineries. Output has increased!
“Between 2000 and 2019, US refining capacity and throughput increased substantially (+2.4 and +1.5 million b/d, respectively), even though domestic oil consumption fell slightly. Indeed, over that period, the US moved from being one of the largest net importers of refined products in the world to being one of the largest net exporters.”
Forbes Feb 2, 2021
“and chip manufacturing”
Another nope.
Chip manufacturing is offshored because profits are higher.
It’s easy and very lazy to blame environmental protection for these alleged problems.
“China for example does not have enough oil for it’s own consumption.”
Now they will. They just signed multi-decade contract with Iran
“Leaving one’s own oil in the ground for future”
US is #1 crude oil producer right now.
@slavuta – comprehension isn’t your strong point I see.
China does not have enough oil reserves in their country to be self-sufficient. If a war breaks out you target shipping lanes. A few submarines on the loose and China is fooked. Same goes for overland shipments. A few stealth bombers picking off rail or road links in foreign countries. One does not need to enter their sea or air space to do it.
Crosley,
energy independence is a nice tale. Net producer – yes. By a small margin and for short time. How are we energy independent if we import oil from Canada, Mexico, Russia, Saudi Arabia and others? To be independent we need to invest huge money to remodel some refineries to use different types of oil. And somehow deliver the new oil to these locations where they get if from the tankers.
See 60-minutes from a few months ago. There are two factories being but to make chips but not the ones auto industry needs.
The arctic circle.
“What’s next??”
You forgot to mention 62 million strong internal enemies and Climate Change.
“It might soon become incredibly difficult to find a new Subaru, let alone one configured to your tastes.”
This means fewer a**-ends of these things to look at. I approve.
So automakers build and build and build more and more cars than necessary that sit on dealer lots, stuff them with computers (made from outsourced bits and ends) for virtually every small feature/gadget that could work perfectly fine if it were left to analogue, and they’re surprised that theres a semiconductor shortage?
Related, I suppose, but my local Toyota mega dealer has only 55 new cars in stock, and *31* of them are:
Corollas, Camrys, Avalon, Prius, and Sienna.
The hot RAV4? 7
Their lot looks sparse, and they’ve gotta be dying in the office.
In reference to the above, the used car lot of my local Ford dealer is bare bones.
I saw saw a 2010 Ford Escape listed one morning which would have made a good 2nd car. My neighbor is a salesman at this dealership and I was ready to give him a call to put the car on hold so I could take a look.
It sold the same day as listed. Not even enough time to put a hold on it.
Wow!!!
A friend took his [actual] Mustang in for inspection, he told me they only had 20 or 21 new vehicles and 18 of them were EcoSports (he wasn’t sure about the others, said there were definitely no trucks).
“his [actual] Mustang”
Funny, even though we’ll disagree on the reference. :)
As for the dealers, I’m having a very brief moment of sorrow for them.
Short term sure, but for the mid term it remains to be seen for the dealers since for the most part their profit is found in used cars and service. If you have no cars to sell, new or used, that leaves service to pull the business.
@SPPPP
Ah, true. I thought, its so bad desperate buyers still weren’t pulling the trigger.
Trying to sell a lot that’s 86% EcoSports sounds like something Kafka would have dreamt up. :)
EcoSport is so bad even desperate buyers are thinking: “I’ll take the next one”.
Who knew, chip shortage will lead to re-urbanization. AOC is so happy now
This weekend I noticed the local Ford ‘superstore’ parking their vehicles diagonally to fill visual space in the truck auxiliary lot; where normally they’d have 150-175 vehicles, they only had maybe 20. I feel sorry for the sales crews….
One of the many GMC-Buick dealerships has Encore GX’s lined up nose to tail!
What does that tell you about the Encore GX?
Well except their selling them at zero discount so the commission per car is pretty damn good right about now. Imagine getting full MSRP on a loaded silverado because that’s whats happening.
I have heard rumblings that is not only semiconductor products in short supply, but also the basic polymer resins used to manufacture the plastics used absolutely everywhere.
This is true. My company is trying to just stockpile resins for the plastics we need. Lead times are already out to 8 weeks or more, and that’s just for the resin.
Haven’t heard any business whiz kids bangin’ the drum for “just in time inventory” lately.
JIT is brilliant until it’s disastrous.
JIT may be still ok for code compilers
As some who worked in low volume manufacturing JIT was always a pain in the ass. very few customers wanted to commit to full volumes which meant a scramble to find parts when they suddenly need to up deliveries in a 6 week time frame.
Everyone seems to keep forgetfing that a fire shut down the Renesas chip making facility in Japan back in March. They had a third of the world market for automotive chips, so their lack of production was bound to hit Japanese automakers.
When you search for how well Renesas has recovered and rebuilt since then, you get reports all the way from 88% to who knows. Supposedly they should be back fully back in business by early July. But there’s no chance they can fill the black hole of shortages or come close.
Me, I’m more inclined to think the drought in the Western US will soon have more ramifications than chip shortages. As in there will be fresh food shortages and Las Vegas will boil. There’s been a history of megadroughts in the region, But there’s way more people living there and elsewhere since the last time. Plus aquifers have been drained with abandon. Let’s see the free market or any other kind fix that.
The West was built up before scientists had compiled a history of drought cycles which tend to repeat themselves every 300 years or so. As it turns out, the last half of the 20th century was a time of peak rainfall and now we are on the downslope of the cycle and it could be another 10-20 years before it shows any sight of letting up.
If the free market could build a water pipeline from the Mississippi River to California, that problem would have a sweet solution.
California has plenty of solar electricity – both potential and realized – so the companies that build oil pipelines could do something both profitable and beneficial.
I took my 2018 VW Sportwagen in for a oil change. The sales manager asked me if I wanted to sell it. He offered me $1,000 more than they sold it to me new.
I called my brother for a ride home.
@Corey Lewis are you listening? :-)
[When life offers you a Mulligan, you should almost always take it.]