NCR US Supply
Published on October 29th 2021 in

Automotive industry crashes

The US automotive industry has perhaps taken the biggest hit from the current supply chain problems, according to a recent survey of 175 supply chain managers, where 52% of respondents said the supply chain disruptions were “very significant,” the highest proportion among the six industries surveyed.

In a similar national survey of 500 automotive repair shops in August, 100% reported that it is taking longer than normal to complete repair jobs, and about half say they are “frequently” having delays in receiving parts and 34% of shop managers said they are “occasionally” having disruptions due to lack of parts.

The most common reasons for the repair and service backup (taking an average of a day and a half longer) were delays in receiving parts, parts distributors running short on drivers, a shortage of technicians available for work, and difficulty in finding qualified technicians.

Dane Rounkles, Honda’s wholesale parts and marketing manager, said that quite a few collision repair shops and consumers report customers taking their vehicles back before all the trim is replaced, although at Honda, trim parts had not been put on the back burner. “One thing we have not done is we have not said, ‘OK, we don’t need trim, we need fenders’. We haven’t done that. We have orders out for everything and we’re constantly getting freight in just as soon as the supplier can get it to us. We haven’t cut off areas of supply. All our orders are still there just as if we were doing business two years ago. We haven’t altered our requests.”

What comes in and what does not depends on so many factors, although as far as distribution of Honda parts, Rounkles said the process is the same – corporate delivers to the dealers who distribute them to repair shops.

Production of new vehicles has taken a massive hit from COVID-19, as consulting firm Alixpartners reported global automakers could lose $210 billion in revenue this year because of the clogged supply chains. Automakers are on track to lose production of 7.7 million vehicles this year.

Honda briefly halted production at most of its US and Canadian auto factories last year, Toyota had a shutdown at its Kentucky plant that led to reduction in Camry, Avalon and hybrid RAV4 production, while GM, Ford and Nissan all have announced production cuts or temporary shutdowns due to a shortage of chips. VW said the unexpected Texas blizzards as well as the chip shortage left it with a big backlog of unbuilt vehicles, from which they are trying recover in the midst of the prolonged supply chain debacle.

This article courtesy of John Huetter of Repairer Driven Education (RDE). Check out the website at: http://www.repairerdrivennews.com/.

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