Independent Online

Tuesday, August 9, 2022

Like us on FacebookFollow us on TwitterView weather by locationView market indicators

Toyota and Honda can probably cope with global chip shortage, Fitch says

File picture: AFP.

File picture: AFP.

Published Feb 18, 2021


TOKYO - The global semiconductor chip shortage is not likely to significantly affect the financial profiles of Toyota or Honda, ratings agency Fitch said on Wednesday.

The carmakers have enough financial flexibility to absorb more costs and maintain significant rating headroom, even if the shortage persists till the second half of 2021, according to the statement.

Story continues below Advertisement

The motor industry has been grappling with a shortfall in chip supply since the end of last year, driven by coronavirus lockdowns in Southeast Asia and bulk-buying by US sanctions-hit Chinese tech giant Huawei Technologies, among other reasons.

The shortage prompted General Motors to extend production cuts at three North American plants last week, while Honda and Nissan were set to sell a combined 250 000 fewer cars in the current financial year.

Meanwhile, Toyota shrugged off the issue in its quarterly report last week and said it had up to a four-month stockpile of chips, with no immediate hit to production expected.

"We believe the shortage should ease or even be resolved in the second half of 2021 as suppliers boost production for automotive clients," Fitch said.

Top economic and national security officials in the White House have launched a new effort to help the US motor industry fight the chip shortage, a White House official said on Thursday.

The issue could impact nearly 1 million units of global light vehicle production in the first quarter, according to data firm IHS Markit.

Story continues below Advertisement


Related Topics: