The global computer-chip shortage continues to trip up the world’s largest car makers with some executives predicting it could weigh on operations well into the second half of this year.
Stellantis
STLA 5.24%
NV, the maker of Jeep, Ram and Chrysler, reported strong first-half earnings on Tuesday and raised its profitability goal for the year, boosted by a rise in demand and pricing.
But the world’s third-largest car company by sales also warned that increases in raw-materials prices are likely to get worse in the second half of the year and the semiconductor shortage would continue to hit production.
Rival
General Motors Co.
separately said Tuesday that the chip shortage will lead next week to idle three North American factories that make large pickup trucks, the company’s biggest moneymakers.
The work stoppage will be the second time in recent weeks that GM’s three main truck plants will scrap most or all output due to the computer-chip crisis.
The semiconductors are critical for vehicles, used in everything from engines and air bags to touch-screen displays.
GM had until recently largely avoided disruption to its pickup truck output by diverting chips from less-popular models. Last week marked the first significant production losses.
The scarcity of parts is taking its toll on dealership lots, where inventory is running historically low.
Subaru Corp.’s
Chief Financial Officer
Katsuyuki Mizuma
said this week that its U.S. dealers had only a seven-day supply of vehicles at the end of July, down from the 45 days they like to have. The dealers are eagerly awaiting deliveries of vehicles from across the Pacific and “as soon as the ship reaches the shore, they sell right away,” he said.
The semiconductor supply is expected to improve in the current quarter, Mr. Mizuma added, allowing the car maker to make up for some lost production in the final half of its fiscal year ending March 2022.
Auto makers including
Ford Motor Co.
,
Volkswagen AG
and
Nissan Motor Co.
“It was a very strong quarter, we’re very pleased with the speed with which the new team has started to execute as one company,” said
Richard Palmer,
Stellantis chief financial officer. Stellantis was created earlier this year when
Fiat Chrysler
Automobiles NV and PSA Group merged.
Still, Stellantis, GM and other car companies have grappled with a turbulent market as the recovery from the Covid-19 pandemic continues. The shortage of chips and other production problems have led to occasional plant shutdowns and bare dealership lots.
And yet, demand for new vehicles has boomed, with cash-rich consumers taking advantage of low interest rates and higher values for their used-vehicle trade-ins. Vehicle sales were near record levels in April and May, before dropping over the summer because of issues with inventory.
Stellantis slashed planned production by around 20% for the first six months of the year due to the global chip shortage. That equates to a cut to planned first-half production of about 700,000 vehicles, the car maker said.
The group expects a similar hit to production in the second half because of the shortage, although it said the situation remains fluid.
Like its competitors, Stellantis also is contending with higher prices for raw materials such as steel, aluminum and copper, which raised its costs by about €700 million in the first half, equivalent to about $831 million. Mr. Palmer said the impact would likely be higher in the second half.
The auto maker is now forecasting an adjusted operating income margin of around 10% globally, assuming no further deterioration of semiconductor supply or additional major virus—related lockdowns.
Net profit was €6.92 billion compared with a prior-year loss of €1.02 billion.
On Tuesday, German luxury car manufacturer
BMW AG
similarly reported stronger earnings and sales in the second quarter, but warned that the global chip shortage and volatile raw-materials prices would put pressure on earnings for the rest of the year.
—Mike Colias and Chieko Tsuneoka contributed to this article.
Write to Nick Kostov at [email protected]
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