Nissan Takes Huge Hit From Ongoing Chip Shortage

Aglobal shortage of semiconductor chipshas stymied the technology industry, and is now having a major impact on new car production. Volkswagen have alreadycut back productionby over 100,000 units. General Motors has been hit hard as well, with the shortageimpacting the Silverado and Sierra truck linesand the Camaro sports car.

Nissan is the latest automaker to feel the sting from the supply chain shortage, as Chief Executive Makoto Uchida told CNBC. "The impact we foresee as of speaking is about 500,000 units in terms of the production this year." In addition to the lack of semiconductor chips, Nissan must deal with skyrocketing raw material prices.

To illustrate how deep an impact 500,000 units will make, Nissan onlysold 285,553 vehiclesin the US for the first quarter of 2021. During a down year in 2020, Nissan moved 819,715 vehicles (compared to 1,227,973 the previous year). Nissan's sales were improving in 2021, but keeping up that pace will be difficult in the current climate. This chip shortage will effectively erase production equivalent to nearly (or possibly more than) half of Nissan's annual US sales.

During an interview with CNBC's "Squawk Box Europe," Uchida said that Nissan would attempt to get production back on track. The global shortage could not come at a worse time for the Japanese automaker, as it attempts to launch a slew of new products in the US. The2022 Nissan Pathfinderjust began production at the Smyrna Vehicle Assembly Plant in Tennessee, and the all-new Frontier pickup truck will enter production later this year.