GM issues vehicle production cuts in North America, cites chip shortage

After Ford Motors, General Motors is the latest auto manufacturer to announce production cuts at its North American plants due to the semiconductor chip shortage.

On Thursday, the automaker said that it would add or extend downtimes at eight plants in the U.S., Canada, and Mexico. Most of the new cuts would continue for two weeks. The production of its Silverado 1500 and Sierra 1500 full-size pickups in Indiana and Mexico would resume after a week of downtime starting September 13.

Associated Press reported that the latest cuts will compound an already short supply of cars, trucks, and SUVs on dealer lots nationwide that have pushed prices to record levels. The number of new vehicles in the lots of U.S. automakers fell by 72% in August 2021 as compared to that in August 2019.

Last month, General Motors said it expected production to be down by about 100,000 vehicles in North America during the second half of the year compared with the first six months.

Even when posting upbeat second-quarter sales in June, the company mentioned that the global semiconductor shortage remains a serious issue for the automotive industry. “Consumer demand for vehicles is also strong but constrained by very tight inventories,” it said.

CNBC reported the other vehicles impacted by the new production cuts to range from its Chevrolet and GMC midsize pickups and vans in Missouri to the Chevrolet Trailblazer in Mexico and crossover production across North America.

Picture Credits - Fortune

With inputs from CNBC