DETROIT—Deepening shortages of key auto parts such as microchips and seat foam are combining with packed ports and a cargo crunch to shut down auto assembly lines—even as dealers clamor for inventory to meet strong demand from increasingly confident consumers.
Production complications are hitting Ford, General Motors, Toyota, Honda, Nissan and Volvo, the auto makers said last week.
Some said they will suspend production lines as they await parts, and others are selectively choosing which models to produce. Some are attempting creative workarounds, such as postponing the installation of certain electronic modules until after a vehicle is built.
The microchip shortage has converged with supply chain interruptions from natural disasters to create an operating challenge for an industry that has enjoyed improving sales since the second half of 2020. But the tension is sure to rise as retailers head into the traditional spring selling season with renewed hope amid widespread COVID-19 vaccination programs.
"The current supply chain issues represent an unusual combination of factors, including shipping constraints, chip shortages and rising consumer demand," said Karl Brauer, executive publisher at CarExpert.com. "While consumer demand was a key component in 2020's reduced new-car sales, production and distribution constraints will likely be the limiting factors for 2021."
In a clear escalation of the drama, Honda Motor Co. said that it will suspend production at most of its U.S. and Canadian factories this week after halting its Mexico plant last week.
"We continue to manage a number of supply chain issues related to the impact from COVID-19, congestion at various ports, the microchip shortage and severe winter weather," Honda spokesman Chris Abbruzzese said. "In some way, all of our auto plants in the U.S. and Canada will be impacted, with most of the plants temporarily suspending production during the week of March 22."
