General Motors’ Gravataí Plant To Remain Closed Until Mid-August

In early March, General Motors halted production at the Gravataí plant in Brazil due to a shortage of electronic components necessary for the locally built Chevy Onix which, in addition to being the most popular car in the South American country, is the only vehicle manufactured in that facility. Although the restart of activities was scheduled for next month at the latest, now the Gravataí plant will remain closed until mid-August.

The automaker just announced that the Gravataí plant will resume production on August 16^th, as the supply problems are preventing the company from complying with the previous schedule. This will mark an unprecedented production interruption of at least five and a half months for the Chevy Onix in Brazil, the longest assembly plant shutdown so far caused by the shortage of semiconductors.

“The automotive industry’s supply chain has been impacted by production stoppages during the pandemic and by the faster-than-expected market recovery. This is temporarily affecting our production schedule in Brazil and worldwide,” said GM South America in a statement. “As a result, production at the Gravataí plant is at a standstill and will return on August 16^th with a single shift,” the company added.

In addition to exposing major supply chain weaknesses, the prolonged downtime of the Gravataí plant has caused serious problems for General Motors’ business in Brazil, including increased losses and disruption of Onix’s sales leadership in the Brazilian market during May. This has also caused tensions in the relationship between the manufacturer and its dealerships, who suffer from an extreme shortage of products to sell.

While the semiconductor shortage problem in the automotive industry is spread globally and has paralyzed dozens of factories around the world, no other automaker in Brazil or abroad has had to stop production for so many months in order to replenish inventories. For that reason, the Brazilian dealer network suspects that GM’s purchasing department is diverting components to other plants in the group.

Chevrolet Onix semiconductor distribution

Regardless of the underlying issues, General Motors is the manufacturer most affected by the semiconductor crisis in Brazil, where until now its main rivals have not had to stop production during such an extended period of time. Seeking to justify the greater difficulties and alleviate damage of its image, GM South America announced earlier this month that the new Onix incorporates twice as many semiconductors as its competitors.

Subscribe to GM Authority as we bring you the latest GM Gravataí plant news, GM Brazil news and ongoing GM news coverage.

Source: Automotive Business