Supply Chain Woes Force Honda To Drastically Cut Production

Aug. 27, 2022 6:19 PM ET byJarryd Neves Industry News /Comments

Some of the company's most popular models are affected.

The ongoing semiconductor chip shortage and supply chain issues haven't been kind to the automotive sector. But while some manufacturers haveexpertly navigated these roadblocks, others aren't so lucky. Companies in the latter camp include Honda, withslowed productionresulting in asales slump.

And it's not getting better, either. As perReuters, the industry giant is expected to reduce Japanese production by up to 40% in the coming months as supply chain problems continue to plague the brand. Honda's Saitama plant is expected to reduce output as early as September, which means that it could suffer more of a sales slump in the third quarter.

Honda

In the same month, the Suzuka facility is expected to cut manufacturing by 30%. This is expected to affectCivicproduction, along with Vezel and Stepwgn assembly. While the previously mentioned vehicles aren't offered for sale in the United States, the Civic remains one of the most popular vehicles in the United States. In 2021, the automaker sold 263,787 units in America alone.

Thankfully, these changes shouldn't threaten US market models. The latest generation Civic is built at the company'sIndiana Auto Plant in Greensburg, alongside other popular models such as the CR-V. According to the Japanese firm, more than 95% of the vehicles it sold in North America (in 2021) were made "using domestic and globally sourced parts."

Honda

That means local production will, most likely, remain unaffected. Hopefully, it continues to stay this way, as Honda cannot afford to starve one of its biggest markets. Earlier this year, the company's global production figures told a chilling story. Due to recurring COVID-19 lockdowns, Chinese production fell by as much as 81.4% compared to the same period last year.

Keep in mind that the Civic Type R will only be produced in Japan, so Americans may still be affected by the supply issues in Japan.

American factories weren't affected as badly but still took a 29% tumble in terms of production output. At the time, rival companies were similarly affected.Toyota, the world's largest automaker (by sales) took a smaller hit, with production numbers declining by 9.1%.

Honda

部t while Honda remains stuck in the proverbial mud, Toyota has seemingly made a recovery. The company said it expects to produce 850,000 globally next month and is looking to increase that figure in November - circumstances permitting, of course.

There's already strong demand for Honda products across the globe and, if the company cannot deliver vehicles to customers, it runs the risk of losing much-needed business. What's more, the all-new CR-V and Civic Type R are readying themselves to hit the production line. We're guessing Honda has already made concessions for the CR-V. After all, the compact crossover remains the automaker's best seller.