Chips shortage limits auto production in Brazil, automakers association says

FILE PHOTO: Outbreak of the coronavirus disease (COVID-19), in Brazil
FILE PHOTO: Fiat Chrysler Automobiles assembly workers build a 2020 Argo model, amid the spread of the coronavirus disease (COVID-19), at the Assembly Plant in Betim near Belo Horizonte, Brazil, May 20, 2020. REUTERS/Washington Alves/File Photo

June 8, 2021

By Alberto Alerigi

SAO PAULO (Reuters) – Automaker’s plants in Brazil have reached a “production ceiling” after the first five months of the year, below pre-pandemic levels, due to a shortage of computer chips, the South American nation’s automakers association said on Tuesday.

A semiconductor shortage has been affecting production of chips and may reduce the global number of automobiles produced by 3& to 5% this year.

“We reached a plateau of 200,000 cars produced monthly in the first months of the year, due to the components shortage,” said Luiz Carlos Moraes, president of Brazil’s automakers association Anfavea. Moraes said he does not expect the components shortage to end until sometime in 2022.

Auto production rose 55% through May compared to the same period a year earlier. But the production of 981,500 units is well below the 1.24 million produced in the same period in 2019.

So far, Anfavea is maintaining its projections of 15% growth in auto sales this year and 25% growth in production.

In May, plants in Brazil produced 192,800 cars, trucks and buses, 1% more than in April. Sales grew 7.7% to 188,700 vehicles. Exports grew 9% to 37,000.

(Reporting by Alberto Alerigi Jr.; Editing by Bill Berkrot)