Volkswagen warns of production hit due to chip shortage

Volkswagen has warned managers to get ready for a bigger production hit in the second quarter compared to the first one as the global chip shortage continues.

“We are being told from the providers and within the Volkswagen Group that we need to face considerable challenges in the second quarter, probably more challenging than the first quarter,” Wayne Griffiths, president of Volkswagen’s Seat, informed the Financial Times.

Griffiths called the shortage the biggest challenge the automaker is dealing with at this moment.

He said production at Seat’s Martorell plant outside Barcelona was currently “hand to mouth”, with the brand making the decision that what cars to build only after it gets chips from providers.

Volkswagen expects chip supply to remain tight in the coming months, however, it could not provide visibility for the entire year.

The chip shortage, which has hit automakers worldwide, emerges from a confluence of factors as automakers, which closed plants for two months during the coronavirus pandemic last year, rival against the sprawling consumer electronics industry for chip supplies.