Automakers and electronics industry resume production due to lack of parts

In the wake of lockdowns in China that have increased supply difficulties in the industry, factories of the three largest automakers in the country – Fiat, Volkswagen and General Motors (GM) – are shutting down again for lack of electronic components. The problem also affects, even more widely, the electronics industry, where the total number of factories with delays or even stoppage of part of the production is the highest since the beginning of the semiconductor crisis.

From the war between Russia and Ukraine, where essential inputs for the chip production process come from, to the delay in releasing cargo at customs due to the standard operation of Federal Revenue inspectors, the two industries have been facing a succession of obstacles to maintain lines running without interruption.

With China’s commitment to zero cases of covid, the situation has become more challenging, as the congestion of ships caused by the closing of ports in the Asian country reduced the availability of containers and vessels for the transport of goods.

Fiat, a Stellantis group brand, will not manufacture cars in the next ten days in Betim (MG) because the Minas Gerais factory does not have enough parts to maintain production. In the first stop of this year, the people of the automobile lines go on collective vacation tomorrow. In the engine and transmission lines, Fiat’s holidays have already started on Monday, 20.

As it did last month, Volkswagen will again stop production in São Bernardo do Campo, in São Paulo’s ABC region, from Monday – this time for ten days, not 20 as in May. Workers return on July 7 with a 24% reduced working day (one day less per week) and a 12% cut in wages, according to the ABC Metalworkers Union.

A three-week stop is also planned in July – between the 4th and 23rd – at the Volkswagen plant in Paraná, where the T-Cross sport utility vehicle is produced.

According to information from unions, GM, which on Tuesday, 21, no longer produced the Onix in Gravataí (RS), will also interrupt between this Wednesday, 22, and Friday activities in the São José dos Campos factory line ( SP) where the TrailBlazer SUV and the S10 pickup are mounted.

production losses

Since the beginning of the pandemic, the Brazilian industry has stopped producing about 1.6 million vehicles. In the first year of the health crisis alone, there were 1.14 million units, according to calculations by the National Association of Motor Vehicle Manufacturers (Anfavea).

That year, all automakers in the country paralyzed activities for several weeks, but the reason was to avoid the contagion of covid. In 2021, when companies were already operating normally, what paralyzed the factories was the lack of components and about 370 thousand vehicles were not produced. Only one automaker, General Motors, had the Gravataí (SP) plant closed for almost five months.

This year, until May, there were 16 factory shutdowns, equivalent to 331 inactive days (average of 20 days per factory), according to Anfavea. During this period, 150,000 vehicles were no longer produced. In March 2020, when the pandemic spread, the sector employed 107,000 employees. Today there are 101,800, 5,200 less.

Consultant Cássio Pagliarini, from Bright Consulting, assesses that, if the Brazilian market had maintained the growth rate registered between 2016 and 2019, in the range of 9% to 10% per year, today domestic sales would be close to 3.3 million of units. Anfavea’s forecast, however, is to reach a maximum of 2.3 million units, a number that can still be revised.

“It is difficult to separate the share of each situation in the loss of production and sales, as there is the pandemic crisis, lack of supplies, logistics problems, war in Ukraine, high commodity prices, high car prices and political instability. ”, ponders Pagliarini.

Threatened reaction?

The new stoppages come after the recovery shown by the automotive industry in the last two months, especially in May, when automakers had the best production of the year. With the performance, and the relaxation of restrictions in Shanghai, where the largest port in the world operates, the direction of Anfavea, an entity that represents the vehicle industry, evaluated at the beginning of the month that the supply of electronic components, responsible for the main bottleneck of the sector, has gradually become less critical.

Since then, however, the lack of parts has continued forcing downtime, which also reinforces the perception in the industry that the problem is far from over.

In the electronics sector, apart from a still confident minority, almost all entrepreneurs have already thrown in the towel in relation to a normalization of supply by the end of the year. A survey carried out by Abinee, an entity that represents this industry, shows that 57% of the factories producing products such as cell phones, notebooks and TVs had production in some way affected last month by the lack of electronic components.

Among companies that reported delays or partial production stoppages, the percentage was the highest since the survey began tracking, in February last year, the ravages of the global shortage of chips in the electronics industry.

Three out of four factories that manufacture products that depend on semiconductors continue to face difficulties in finding the input on the market. Many of them have sought alternative suppliers, even paying higher prices, and renegotiated delivery times with customers, among other measures to get around the situation.

The information is from the newspaper. The State of São Paulo.

About Yadunandan Singh

Born in 1992, Yadunandan approaches the world of video games thanks to two sacred monsters like Diablo and above all Sonic, strictly in the Sega Saturn version. Ranging between consoles and PCs, he is particularly fond of platform titles and RPGs, not disdaining all other genres and moving in the constant search for the perfect balance between narration and interactivity.

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