MEXICO CITY: The Mexican Automotive Industry Association (AMIA) said on Monday that a third wave of COVID-19 infections had delayed efforts to fix a semiconductor chips shortage and could lead to lower-than-expected auto production in Mexico this year.
AMIA head Fausto Cuevas said Mexico’s auto production and exports this year could be at similar levels to 2020, after AMIA had previously estimated production would increase 12% this year.
“The scenario for the end of the year could be for volumes similar to last year if the semiconductor shortage remains the same as in July,” Cuevas told a news conference.
He said the coronavirus pandemic had led to increased demand for semiconductors in a range of sectors besides autos, complicating efforts to boost supply.
Mexico’s auto production in July dropped 26.5% compared with the same month a year before, while exports were down 23.6%.
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The idling of the plants in Flint, Michigan; Fort Wayne, Indiana; and Silao, Mexico, comes a week after the plants resumed production following an earlier shutdown related to the chip shortage.
The situation has compelled vehicle makers to redesign products, source from the open market, and get into a three-way tie-up – i.e. car maker-tier I vendor and chipset maker. Due to the shortage, the vehicle makers are compelled to source parts from the open market at higher prices, affecting their margins.