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Semiconductor shortage chips away at Honda, Nissan production

The automotive industry is facing a widespread shortage of semiconductors for use in key vehicle control systems. Volkswagen AG was one of the first manufacturers to do so with challenges across its MQB platform, according to 451 Research, with an impact on mass market models. The challenge has been the result of semiconductor manufacturers prioritizing nonautomotive applications during the pandemic as a result of the earlier slump in demand for vehicles.

Similarly, Honda Motor Co. Ltd. will cut production of its vehicles in Japan by 4,000, including the Fit model, in January, The Nikkei reported, due to a shortage of semiconductors for drive systems with the shortfall rising to "tens of thousands" of vehicles in the first quarter.

Panjiva's analysis of company filings shows that Honda's production in Japan in January 2020 reached 60,660 vehicles and averaged 65,950 vehicles in the three months to Nov. 30, 2020. The direct impact on Honda's overseas network may be limited given that exports accounted for 10.4% of production in the past three months and fell by 30.3% year over year. Honda's supply chain was also one of the first to suffer disruptions due to upstream parts shortages during the pandemic, as outlined in Panjiva's research of Feb. 10.

Similarly, Nissan Motor Co. Ltd. has had to cut production of its Note vehicle by 5,000 units due to semiconductor shortages in January and may need to do the same in February. The firm's domestic production reached 65,800 units in January 2020 and 52,200 units in the three months to Nov. 30, 2020, on average. The impact on Nissan's overseas sales may be more significant with 63.1% of the last three months' output sent overseas.

It would not be a surprise to see other Japanese mass-market manufacturers face similar challenges. That has come as the industry already struggled to recover. Total exports by the big seven automakers fell by 4.2% year over year in November 2020, reversing a modest gain in October the same year and including a 25.7% slide in shipments by Nissan, which was only partly offset by an 11.1% rise in exports by Honda. On average, the groups exported 54.8% of their Japanese production in the past three months.

While the autos sector is struggling, Panjiva's analysis shows that global exports of semiconductors for all applications have been accelerating with shipments from China, Japan, South Korea, Taiwan and the U.S. combined having risen by 17.5% year over year in November 2020, compared to a 12.9% rise in October the same year. Growth has been led by a 26.4% surge in exports from China, while those from Japan have remained lackluster with growth of just 0.1% in November 2020.

SNL ImageChristopher Rogers is a senior researcher at Panjiva, which is a business line of S&P Global Market Intelligence, a division of S&P Global Inc. This content does not constitute investment advice, and the views and opinions expressed in this piece are those of the author and do not necessarily represent the views of S&P Global Market Intelligence. Links are current at the time of publication. S&P Global Market Intelligence is not responsible if those links are unavailable later.