Chip shortages worsen for car makers

May 06, 2021 // By Christoph Hammerschmidt
Semiconductor shortage impacts car production across the board
Car manufacturer Stellantis has had to cut production by 190,000 units, 11 percent of its total capacity, as a result of the current chip shortages and the situation is set to get worse

Stellantis, formed by the merger of Fiat Chrysler and the PSA Group, is not alone in this predicament - other carmakers are currently experiencing similar shortages. The situation is getting worse rather than better.

Stellantis' recently presented quarterly figures were actually quite good. Turnover, sales, market share - all in the green. However, the figures could have been much better. As further effects of the semiconductor shortages cannot be predicted for the rest of the year, the carmaker is again expecting a deterioration in the second quarter.

Other carmakers around the world are also suffering the consequences of the chip shortages after cancelling orders at the start of the Covid-19 pandemic. Chip makers then understandably took advantage of opportunities in the booming communications and consumer electronics (including PCs) and signed supply contracts with companies from these industries for far larger quantities than the car industry.  For example, Apple's semiconductor demand alone is larger than that of all car manufacturers combined. When the car industry realised that demand had not collapsed as much as feared, however, it had to fall in line with its new orders.

The consequences are now visible. Ford Germany recently announced that it would have to stop production almost completely at its plant in Cologne - and for several months at that. The reason here too: There is a shortage of semiconductor chips for installation in the cars. About 5000 employees are affected; work will be largely suspended until 16 August.

BMW is also affected, although not quite as severely. According to reports, there are delays in deliveries, especially for the X1 and X2 models as well as for the high-volume 1 series. Daimler is installing the available chips, as far as feasible, in the Mercedes S-Class - at the expense of the "simpler" A- and B-Class. Within the Volkswagen Group, the model series Tiguan and Jetta with the production


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