Ford Motor Co. (F) - Get Ford Motor Company Report shares slumped lower Thursday, with General Motors (GM) - Get General Motors Company (GM) Report following suit, as investors reacted to plans from the world's biggest carmaker to slash production amid the ongoing shortage in semiconductor supplies.
Toyota (TM) - Get Toyota Motor Corp. Sponsored ADR Report, the world's biggest carmaker, said it would produce around 360,000 cars worldwide next month, a 40% reduction from its recent average, but pledged to hold its 2022 financial year target of 9.3 million. World number two Volkswagen (VWAGY) , meanwhile, cautioned Thursday that the "supply of chips in the third quarter to be very volatile and tight" and said it can't rule out a cut to its production schedule over the coming months.
Ford, which only yesterday unveiled plans to temporarily shutter an F-150 assembly plant in Kansas City, told investors last month that "navigating these chip constraints has led us to make important permanent changes in our business model".
Ford shares were marked 1.9% lower in early trading Thursday to change hands at $12.76 each. General Motors shares slumped 2.7% to $49.45 each.
Ford posted second quarter earnings of 13 cents a share on revenues of $26.8 billion, well ahead of the Street consensus of a 3 cents per share loss on July 28, and lifted its full-year profit forecast to around $5.5 billion.
Earlier this year, GM warned that chip shortages would cuts its 2021 earnings by as much as $2 billion, with vice president Phil Kienle noting that it "remains complex and very fluid."
GM's second quarter earnings were disappointing last month, but it lifted its full-year outlook to an adjusted range of $5.40 and $6.40 per share.