The global chip shortage isn't ending anytime soon. Not only has it caused automakers to temporarily suspend production, but car companies are also forced to wait in line to get a hold of their supply of chips and semiconductors.

One of the major automakers that's been greatly affected by the global chip shortage is Nissan. According to CEO Makoto Uchida, they plan to make 500,000 fewer cars in 2021 as the chip shortage continues disrupting the automotive industry. With a price surge in raw materials, Uchida said that the company is struggling.

“The impact we foresee as of speaking is about 500,000 units in terms of the production this year,” said Uchida.

With the company estimating that they will only make half a million fewer vehicles for 2021, will this affect Nissan's road to recovery? Last year, Nissan managed to sell a total of 4,052,000 units globally despite the pandemic. This translates to a 17.8% drop in unit sales, and an operating loss of JPY 150.7 billion compared to their 2019 financial report.

Due to chip shortage, Nissan might make 500K fewer vehicles in 2021 image

For 2021, Nissan expects to increase unit sales by 8.6% from 2020 to 4,400,000 units. But with Nissan already projecting that they might make 500,000 fewer cars this year, it could mean Nissan might only get to build 3,900,000 vehicles in total. This may put Nissan into a predicament since they are looking to get themselves back into profitability.

The company did, however, sold all of its shares in Daimler two weeks ago. Nissan plans to use the funds acquired from selling its Daimler stake to enhance its business competitiveness. Perhaps this will help Nissan weather the shortage in chips and semiconductors.

With the global chip shortage set to last well into 2022 (and possibly even into 2023), automakers like Nissan might need to come up with their own chip-making business to avoid a similar problem in the future.

Source: CNBC