Nissan Expects Chip, Parts Crunch To Extend Until At Least Mid-2022

Nissan expects global supply chain constraints and the sector-wide semiconductor shortage to continue until at least the middle of 2022, putting pressure on production, the Japanese carmaker's chief operating officer said on Tuesday.

A parts and chip shortage, caused in part by pandemic-driven disruptions in moving freight and an unexpected recovery in demand, has created headaches for carmakers globally.

"It will take some more time to get back to the normal operations. Day by day it is improving but I do believe it will continue for a while," Nissan's Ashwani Gupta told Reuters, adding it would extend for the first half of 2022 at least.

"For us today, the challenge which we have is how we produce the car not how we sell the car."

Nissan expects to make 3.8 million cars this year, down from an original target of 4.4 million.

Gothenburg-based Volvo Cars last week warned that the semiconductor shortage would continue into next year.

Nissan, which like other big global carmakers has been forced to cut production because of the shortage of semiconductors and other components, expects to make 3.8 million cars this year, down from an original target of 4.4 million.

Total global production of all carmakers should be "close to" 80 million cars this year, up from 76 million in 2020, Gupta said, adding that it would take some time to return to between 95 and 97 million units a year, without saying when.

Nissan will spend 2 trillion yen over five years to increase vehicle electrification

ELECTRIFICATION

Nissan last month announced its electrification push, committing to spending 2 trillion yen over five years to increase vehicle electrification to catch up with rivals in one of the fastest growing segments for car makers.

The announcement by Japan's No. 3 carmaker, which includes launching 23 electrified vehicles, including 15 electric vehicles (EVs), by 2030, did not impress some analysts who see Nissan already lagging its rivals.

Nissan shares have dropped from 593.2 yen at the time of the announcement on Nov. 29 to close at 570.5 on Tuesday.

"What's very important is our electrification plan is grounded, realistic and sensible," Gupta said.

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