U.S. auto industry asks for government aid amidst chip shortage crisis

Several prominent entities from the U.S. auto industry have reportedly urged the federal government to provide aid amidst the chip shortage crisis across the globe.

The group represents most of the major automakers that have production units in the United States, such as Hyundai Motor Co., Toyota Motor Corp., Volkswagen AG, Ford Motor Co., and General Motors Co.

These entities have warned that the crisis could not only disrupt production for the next six months but also lead to the development of 1.28 million fewer vehicles this year.

With the COVID-19 pandemic bringing the automotive sector to a halt, chipmakers have been focusing on the consumer electronics industry with more people opting to spend more time at home. This affected automakers on a large scale as they looked to recommence production.

According to seasoned experts, the United States Commerce Department can allocate a portion of funding through a proposed bill to expand semiconductor production in the country as well as to cater to the auto sector's needs.

Earlier in February, U.S. President Joe Biden had ordered different federal agencies to act against the chip crisis. The federal government is also seeking USD 37 billion in funding in a bid to boost chip manufacturing in the United States.

The group has urged the United States government to specify a particular percentage of the funds to be allocated for building chip production units that could further aid the automotive sector. It is worth noting here that the apparent percentage is based on the estimated needs of the auto industry.

Meanwhile, Japanese automobile manufacturer Subaru is planning to make certain production adjustments at its local manufacturing facilities, owing to the semiconductor shortage. The move is likely to affect the production of around 10,000 vehicles, cited sources close to the matter.

Source Credits –

https://www.reuters.com/article/us-chips-shortage-autos/u-s-auto-industry-calls-for-government-help-as-it-warns-of-impact-of-chip-shortage-idUSKBN2BT09M