According to Nikkei News, Honda Motor will reduce vehicle production due to the shortage of semiconductors.

The report pointed out that Honda Motor will first reduce production of about 4,000 vehicles this month. This change will mainly affect the Fit subcompact model produced in Suzuka City, Mie Prefecture, Japan.

The report also said that the production reduction could be even greater later this year. A person familiar with the matter said: "The situation may be more severe from February. The shortage may affect thousands of cars from January to March in Japan alone."

In October last year, a fire at AKM's semiconductor factory in Miyazaki Prefecture, Japan, caused a shortage of audio chips. But the incident obviously has nothing to do with Honda's production cut. A Honda representative said: "At present, we have sufficient AKM parts inventory."

Honda will not stop production operations this month, but it is expected that the company will limit the number of vehicles produced daily.

Since the process of sourcing materials and converting them into semiconductors takes more than three months, it is a difficult task to quickly adjust production volumes according to demand. The Covid-19 pandemic has caused demand for cars to fall in the first half of 2020. At that time, automakers temporarily cut semiconductor orders, and chip suppliers revised their production plans accordingly.

Surprisingly, last summer, demand in the automotive market rebounded, especially in China. However, semiconductor production capacity has been unable to keep up. Due to the global economic stimulus measures and people buying vehicles in order to avoid taking public transportation, the car market is recovering from the Covid-19 crisis faster than expected.

In addition, there are media reports that Volkswagen announced last month that it would cut production in China, North America and Europe due to semiconductor shortage. Auto parts suppliers Continental and Bosch have admitted that delivery has been delayed due to the semiconductor shortage.