The automotive supply chain is tiered, and semiconductors are a component within a subsystem of the vehicle – such as a display, an infotainment system or a sensor. At best, a shortage could cause some trim levels or optional equipment to become unavailable. At worst it could stall production of an entire model line. It’s a particular challenge for an industry which tends not to hold much inventory.
AutoForecast Solutions is projecting semiconductor shortages will reduce vehicle production by 202,000 units during 2021, and a quarter of that lost volume will be in Europe . European industry association ACEA expects supply constraints to remain until the third quarter of 2021, resulting in “considerably lower” production volumes and postponed deliveries for the rest of the year . This is also happening as social distancing measures affect staffing at factories throughout the supply chain.
Manufacturer forecasts differ. Ford is expecting a 10-20% decrease in first-quarter production , while Volkswagen says it affects vehicles on the MQB platform  which is widely used across its model range. Nissan  and Honda  have paused production in the UK citing supply challenges, while Daimler  is cautiously projecting it can make up for lost volume in Q1 through the rest of the year.
A notable outlier, Toyota secured several months of semiconductor volume in advance, and is confident that production won’t be affected .