Chip shortage: Toyota to cut global production by 40% • Hacker News Board

Re: Chip shortage: Toyota to cut global production by 40%

#261

Post by PaywallBuster » Thu, Aug 19, 2021, 2:06 PM UTC

only_as_i_fall wrote: post #229

dimitrios1 wrote: post #224

Earlier quoted context omitted.

The solution to a market inefficiency isn't to involve a more inefficient entity.

Then what's the solution? Seems like the government is the only entity that can intervene if market forces are counter to supply chain resilience. This is partially the justification for agricultural subsidies in the US, so clearly there is precedent.

Apple approach, invest in your supply chain

Extra points by diversifying from China/Taiwan

In direct opposition, Auto makers approach of minimizing inventory and producing "just-in-time" caused them to be vulnerable to supply chain or big market shifts

Re: Chip shortage: Toyota to cut global production by 40%

#262

Post by bluGill » Thu, Aug 19, 2021, 2:07 PM UTC

cuu508 wrote: post #117

josephd79 wrote: post #86

Earlier quoted context omitted.

probably not, regulation and crack down on pollution from vehicles. Have you ever rode in an older car that uses a carburetor instead of fuel injection? Nothing like the crisp smell of gasoline in the morning... or anytime you drive it.

Of course, you need some electronics. Let's rephrase: which cars from western mainstream manufacturers are currently the "lowest tech"? No infotainment, no digital dash, no touch-sensitive anything, as few sensors as is viable to still be road legal? And a related question: modern cars are full of tech because that's what market demands. Can we expect the trend to reverse at some point?

> modern cars are full of tech because that's what market demands. Can we expect the trend to reverse at some point?

No, they are nice to haves. anyone who is looking to save money on a car will buy a used car with those features because they get the cheaper price and the features.

Re: Chip shortage: Toyota to cut global production by 40%

#263

Post by Causality1 » Thu, Aug 19, 2021, 2:08 PM UTC

only_as_i_fall wrote: post #229

dimitrios1 wrote: post #224

Earlier quoted context omitted.

The solution to a market inefficiency isn't to involve a more inefficient entity.

Then what's the solution? Seems like the government is the only entity that can intervene if market forces are counter to supply chain resilience. This is partially the justification for agricultural subsidies in the US, so clearly there is precedent.

The nightmarish results of agricultural subsidies in the US is an excellent reason to not involve the government in the chip shortage.

Re: Chip shortage: Toyota to cut global production by 40%

#264

Post by blululu » Thu, Aug 19, 2021, 2:08 PM UTC

dimitrios1 wrote: post #224

throwawaygh wrote: post #220

Earlier quoted context omitted.

A negative feedback loop in semiconductor supply seems like a situation where a government should just step in manage the market a bit.

The solution to a market inefficiency isn't to involve a more inefficient entity.

This is a pretty axiomatic view that governments can never be as responsive or as efficient as markets. The more commonly accepted economic wisdom is that they are usually less efficient and responsive than free market forces operating under ideal conditions. There is a lot of room for market failures, inefficiencies and temporal dynamics to change the balance. The are plenty of examples of government regulatory bodies that have a nice anchoring effect on the relevant markets. The Federal Reserve Bank, for example, responds quickly to changing market conditions, looks at the data and intervenes at a speed that keeps pace with the rapidly fluctuating market it regulates.

Re: Chip shortage: Toyota to cut global production by 40%

#265

Post by tlocke » Thu, Aug 19, 2021, 2:08 PM UTC

eldaisfish wrote: post #247

btbuildem wrote: post #236

I don't see this raised anywhere -- but what's so bad about producing fewer cars (the poor neglected shareholders and exec bonuses aside)? It's almost as if we would need to lean into this, reducing growth and producing fewer cars would be in line with efforts to mitigate the drivers of climate change. What if car manufacturers pivoted their KPIs and focused on making long-lasting, serviceable vehicles? Toyota is alr…

Consider for a moment the people outside the developed world whose lives are greatly improved by cars. Scarcity drives prices up putting things out of their reach.

Cars tend to diminish quality of life. Local, walkable and cyclable neighbourhoods on the other hand enable people to flourish. When people have to travel by vehicle, trains and trams are superior to cars.

Re: Chip shortage: Toyota to cut global production by 40%

#266

Post by melfrey » Thu, Aug 19, 2021, 2:09 PM UTC

Will the car price starts to increase due to the chip shortage?

Re: Chip shortage: Toyota to cut global production by 40%

#267

Post by jaywalk » Thu, Aug 19, 2021, 2:09 PM UTC

akiselev wrote: post #167

cuu508 wrote: post #117

Earlier quoted context omitted.

Of course, you need some electronics. Let's rephrase: which cars from western mainstream manufacturers are currently the "lowest tech"? No infotainment, no digital dash, no touch-sensitive anything, as few sensors as is viable to still be road legal? And a related question: modern cars are full of tech because that's what market demands. Can we expect the trend to reverse at some point?

> no digital dash Rear view cameras are mandatory since ~2014 so I don't think this is possible.

He probably means no digital instrument cluster, which isn't necessary for a rear view camera. Most lower-end vehicles put a dedicated screen in the mirror for the rear view camera.

Re: Chip shortage: Toyota to cut global production by 40%

#268

Post by bluGill » Thu, Aug 19, 2021, 2:10 PM UTC

lostapathy wrote: post #85

phkahler wrote: post #55

Earlier quoted context omitted.

Most auto companies don't take delivery of chips except for managing production of a few key modules like engine controllers. Most of the chips in your car are in components made by suppliers with circuit boards often made by a second tier supplier. Combine that with many chips having no alternate and I don't see how Toyota could really stay exempt from this problem. OTOH not every chip maker is having trouble keepin…

Toyota doesn't have to physically hold the chips/modules to accomplish they. They have contracts with suppliers that lock in how much inventory the supplier has to have on hand, and how much supply they need locked in from their own upstream suppliers. One criticism of Toyota's production system is that they aren't so much "just in time" as it sounds on the surface, rather they just force their suppliers to run the w…

Toyota is in the logistics business more than the car business. Sure cars make the money, but the logistics are the hard part of a large car factory.

Re: Chip shortage: Toyota to cut global production by 40%

#269

Post by alistairSH » Thu, Aug 19, 2021, 2:11 PM UTC

mikeyouse wrote: post #169

codesnik wrote: post #138

Earlier quoted context omitted.

how? can you capitalize on that upside somehow? sell them, live in a tent until prices are down?

Obviously most people can’t do this but a family member was recently approached by the dealer who sold him his most recent work truck. He’s driven like 30k miles on it in the past 2 years and it was a $75k Chevy diesel. Dealer offered him $90k to buy it back from him (to sell to someone else) and my family member said “Sure”. So he made $15k on an asset that should have lost 1/2 its value by now. Obviously rare and h…

But what does he drive now? If the truck was just a toy that didn't need replaced, then good for him. But that's not the case for the majority of people.

Re: Chip shortage: Toyota to cut global production by 40%

#270

Post by lostapathy » Thu, Aug 19, 2021, 2:12 PM UTC

bluGill wrote: post #268

lostapathy wrote: post #85

Earlier quoted context omitted.

Toyota doesn't have to physically hold the chips/modules to accomplish they. They have contracts with suppliers that lock in how much inventory the supplier has to have on hand, and how much supply they need locked in from their own upstream suppliers. One criticism of Toyota's production system is that they aren't so much "just in time" as it sounds on the surface, rather they just force their suppliers to run the w…

Toyota is in the logistics business more than the car business. Sure cars make the money, but the logistics are the hard part of a large car factory.

In that way - one could argue they "manage the logistics business" - but that they don't actually want to do the logistics (or own the inventory/warehouses).