There is no escaping the chip scarcity, and if anyone still needed more evidence, General Motors’ recent news regarding the Fort Wayne factory serves as a pretty good affirmation.
Due to a shortage of semiconductors, the American automaker is temporarily closing the facility; activities are anticipated to resume later this month.
Similar to General Motors, Hyundai also struggles to manage the disruptions brought on by the chip crisis, and in the end, the monthly sales are the ones who suffer.
Unsurprisingly, the most recent corporate numbers for the month of June show a dip, with Hyundai’s total sales falling 4.5 percent compared to the same period last year. More specifically, Hyundai sold fewer automobiles in June than it did in the same month the year before (356,631 against little over 340,500).
The disparity between the first six months of the two years is considerably more concerning than the drop itself, which may not be all that significant.
Hyundai sold 1.87 million automobiles from January to June of this year, compared to over 2 million over the same period in 2021. In 2022, the gap indicates a decline of 7.6 percent.
The automaker has acknowledged that the chip shortage has a significant influence on its output and sales, and at this point, it’s difficult to predict when the problem will end.
Although no one can say for sure, IT behemoths like Intel don’t think the global stockpile will return to pre-2020 levels before 2024. In other words, the chip shortage is still in its early stages, and automakers worldwide will likely face more challenges for another two years.
However, the majority of businesses anticipate considerable inventory improvements in the second part of this year.
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Hyundai Might Be Beginning To Reverse The Computer Chip Shortage
After the computer chip shortage hampered sales in August and September, Hyundai intends to have enough computer chips in the fourth quarter to make vehicles and trucks for the U.S. market in accordance with its original business strategy.
The whole auto sector is experiencing a lack of new automobiles and trucks as a result of the chip shortage. This year’s record-high car costs are also being driven by record-high demand.
In a press conference held online on October 13, Hyundai Motor North America’s president and CEO, Jose Munoz, also served as the company’s worldwide COO.
That’s good news for Hyundai and could be a precursor to the car industry as a whole beginning to move over the chip shortage.
According to Bill Rinna, director of Americas Vehicle Forecasts for LMC Automotive, in a separate webinar on October 13, the chip shortage that started in early 2021 has already reduced North American production of the entire sector, not just Hyundai, by around 1.98 million cars and trucks.
Defective computer chips from third parties may be about to cause Hyundai’s manufacturing to be delayed, according to a leaked internal letter.
Hyundai may soon experience interruptions after avoiding the global semiconductor chip scarcity for more than a year.
Hyundai may experience manufacturing delays starting tomorrow, according to a “urgent notice” published on the company’s intranet in South Korea and leaked to the local newspaper ET News.
Defective chips used in satellite navigation systems are believed to be to fault, and the automaker anticipates that new-car production will be affected starting on January 26.
However, Hyundai denied any manufacturing delays in a statement that was translated and provided to the Korean media.
“Production is not being held up by a single semiconductor supply issue for a particular item, despite the seriousness of the semiconductor supply and demand crisis. Overall, semiconductor production, demand, and supply are severely constrained.”
Wheels was informed by a spokeswoman for Hyundai Australia that the local division was not aware of any delays with vehicles with GPS.
The “mass faults” relating to semiconductors utilized in the microcontroller unit for audio, video, and navigation are blamed in the internal warning that was released.
The French-Italian business ST Microelectronics is accused of delivering the defective chips, but the company declined to corroborate the claims.
Hyundai has survived the storm, being one of the few that continued to order the computer chips despite industry-wide problems from the pandemic, despite practically every other major automaker having with difficulties connected to the global semiconductor shortage.
According to a source with connections to Hyundai’s purchasing, the company “like other manufacturers, also intended to curtail production at the beginning of the year because of COVID-19,” according to a Reuters report from February 2021.
But procurement noticed that the semiconductor sector was cutting back on the manufacture of car chips and warned that if we didn’t acquire these as well, we would have problems down the road.
The most recent allegation claims that Hyundai presently has 34,000 Tucson SUV orders with no known delivery date and 44,000 orders for the all-electric Ioniq 5 with projected delivery timeframes of up to 12 months.
Despite billions of dollars being invested in new manufacturing facilities throughout the world, both chip manufacturers and automakers are issuing warnings that the semiconductor shortage will persist into 2023.
In its largest market, North America, Hyundai says it anticipates a 20% increase in sales in 2022.
SEOUL — Hyundai Motor Co. of South Korea predicted on Tuesday that after a global chip scarcity began in the second quarter, it will gradually ease in the first half of this year.
According to Executive Vice President Seo Gang Hyun on the conference call for Hyundai, “the normalization of car chip supply and demand is expected in the third quarter, when the capacity of semiconductor businesses is projected to rise.”
According to Seo, the COVID-19 pandemic in Southeast Asia that persisted for a long time and the ensuing problems with chip sourcing caused Hyundai’s sales to fall short of the anticipated 4 million vehicles in 2021. The shortage will continue in the first quarter as a result of the spread of the Omicron variant.
The supply of the fundamental chips that power the world’s automobiles, smartphones, and household appliances is centered in Southeast Asia, with Malaysia’s chip assembly industry accounting for more than a tenth of a global commerce worth more than $200 billion. Since last year, lockdowns due to COVID in the area have hampered a number of companies.
In its largest market, North America, Hyundai says it anticipates a 20% increase in sales in 2022.
The combined global sales of Hyundai and its subsidiary Kia Corp., two of the top 10 automakers in the world by sales, are expected to increase by 12.1% in 2022. Last year, due to semiconductor shortages, their sales fell just under four percent short of their target of 6.92 million vehicles.
Due mostly to the payment of corporation taxes, Hyundai reported a profit decline of close to 50% for the quarter ending in December, considerably falling short of analysts’ expectations.
Compared to 1.1 trillion won a year earlier, it reported a net profit of 547 billion won (US$456 million). That contrasted with the 1.5 trillion won average analyst projection gathered by Refinitiv SmartEstimate.
According to analysts, rising raw material costs, component shortages, and logistical snags brought on by the pandemic are anticipated to push expenses further higher in the current quarter.
According to Lee Jae-il, an analyst at Eugene Investment & Securities, “it is still impossible to anticipate how the chip scarcity will roll out… there will also be additional risks concerning the proliferation of the Omicron variant and potential problems relating to Ukraine tensions.”
Due to an increase in COVID instances and problems with the supply of parts, Japanese automakers Toyota Motor Corp. and Honda Motor Co. have announced that they will reduce their output this month.
Analysts anticipate Hyundai will increase vehicle prices to offset the impact of the ongoing supply chain and distribution issues that are delaying deliveries and production.
Major automakers and dealers have already increased car prices over the past year, including Tesla Inc. and Honda.
Is the chip scarcity affecting Kia and Hyundai?
The Hyundai Motor Group’s E-GMP platform was used to build the all-electric Genesis GV60 SUV, which is shown in this file photo from Hyundai Motor. Han Motor Co.
Due to the protracted semiconductor scarcity, Hyundai Motor Co. and its affiliate Kia Corp. reported Friday a 31 percent decline in their combined sales in the United States from a year ago.
According to sales figures from the businesses, Hyundai and Kia sold 117,373 automobiles in the world’s largest auto market in May, down from 170,315 units a year earlier.
According to the report, Kia’s sales decreased by 28 percent to 57,941 units from 80,298 over the same period while Hyundai’s sales fell by 34% to 59,432 units from 90,017 a year earlier.
In a statement, Hyundai Motor America’s senior vice president Randy Parker, who oversees local sales, stated, “We anticipate demand to stay high and inventory levels to improve later in 2022.”
According to Vice President Eric Watson, in charge of sales operations at Kia America, the business anticipates momentum to continue during the summer sales season due to strong demand for the Sportage gasoline hybrid and the all-electric EV6.
According to the data, the carmakers’ sales in the US between January and May decreased by 15% to 548,974 vehicles from 644,695 during the same time last year.
Are there any chip shortages at Hyundai?
Hyundai’s revenues increased as a result of sales of the luxury brand Genesis. The big Genesis G90 sedan is displayed.
SEOUL — Hyundai Motor reported a 59 percent increase in second-quarter profit as demand for the South Korean automaker’s high-margin SUVs remained robust and a weak won currency increased the value of overseas revenues.
For the months of April through June, net profit increased from 1.8 trillion won to 2.8 trillion won ($2.13 billion).
Hyundai said in a statement on Thursday that despite a slowdown in sales volume in an unfavorable economic environment, “a robust sales mix of SUV and Genesis luxury models, reduced incentives from a lower level of inventory, and a favorable foreign exchange environment helped lift revenue in the second quarter.”
With the global chip shortage beginning to ease, Hyundai was able to resume weekend and overtime work at its domestic operations, making up for the lost vehicle production brought on by the statewide trucker strike in June.
According to Lee Jae-il, an analyst at Eugene Investment & Securities, “after nearly two years of chip shortages, manufacturers, including Hyundai, are acquiring enough chips to produce at virtually full capacity.”
Is the lack of vehicle chips getting better?
The capacity to produce these older chips “grew 6% in 2021, is predicted to expand by 5% in 2022, and will increase again by another 3% in 2023,” according to the research.
Which automobile types remain untouched by the chip shortage?
- Touchscreen: BMW BMW.
- Car and Driver Marc Urbano.
- Lexus: Super Cruise (Now Resumed)
- Cadillac.
- HD Radio for GMC and Chevrolet.
- Heated seats and steering wheels for Chevrolet/GMC vehicles.
- Satellite navigation: Ford
- Ford
Why is there a lack of chips for new cars?
The primary causes of the chip scarcity are still pandemic-related manufacturing closures and disruptions in consumer demand, even two years after COVID-19 first shocked the globe with shutdowns.