Volkswagen brand logo

Volkswagen warns chip shortage threatens car production

Volkswagen is gearing up for a major production disruption from a shortage of semiconductors.

The world’s largest automaker will need to ensure their first-quarter manufacturing plans around the world because of the bottleneck, the automaker said in an emailed statement Friday, without mentioning specific figures. The number of cars affected could be in the low six-digit range, according to people knowledgeable about the matter.

The situation remains fluid as the reallocation of parts to mitigate the impact might distort the assembly of automobiles that aren’t directly affected by the chip shortage, said the people, who asked not to be identified as they were discussing internal deliberations. A spokesman for VW refused to comment.

The supply-chain issue could keep the automaker from getting off to a smooth start next year after the coronavirus undercut manufacturing operations during much of this year. The world’s best-selling automaker has navigated fallout from Covid-19 relatively well so far, helped by an increase in demand in China, its largest market.

Dealers and lenders alike have still complained that the auto industry hasn’t rebuilt inventory fast enough. Together with supplier constraints, automakers have been stretched thin by coronavirus-related absenteeism and protocols to protect workers on factory floors.

Continental AG, Europe’s second-largest car-parts maker and among VW’s leading suppliers, said it can’t rule out production disruptions related to chip shortages. The company declined to comment on specific customers.

“Due to the usual long lead times in the semiconductor industry, the required additional volumes will only be available with a considerable delay,” said the German manufacturer in an emailed statement. “The potential bottlenecks will extend into 2021.”

Robert Bosch GmbH, the world’s largest auto-parts maker, said it’s working closely with providers and customers to maintain as many deliveries as possible.

It is unclear if VW’s German peers will also be hit by a shortage. BMW AG said in a statement it’s watching over the situation and in contact with suppliers. A spokeswoman said the company isn’t expecting disruption to production.

Daimler AG’s China chief Hubertus Troska informed reporters earlier Friday he wasn’t aware of manufacturing bottlenecks at the maker of Mercedes-Benz luxury vehicles.

Volkswagen cautioned last month that 2021 is shaping up to be a “transition year” and that it might take until 2022 before it returns to pre-crisis financial planning. While industry sales in China have expanded five straight months, another wave of coronavirus infections is hitting Europe and has led to lockdowns across the continent.

Related Posts

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.