German Car Makers Warn of Persistent Chip Shortages

Major German car manufacturers such as Volkswagen, BMW and Mercedes parent Daimler do not expect the chip shortages that plague the car industry to disappear any time soon. Mercedes-Benz boss Ola Källenius thinks the problems could continue well into 2023.

 

Volkswagen shares that opinion. BMW also warns that the problems with the semiconductors could continue for “many months”.

Källanius made his forecast ahead of the Munich auto show this week. Daimler was recently forced to adjust its projections for this year. In addition, the car manufacturer expects sales this year to be the same as last year. Previously, a “significant increase” in sales was expected.

Mercedes was hit this quarter by factory closures in Malaysia, which has grown into a major centre for testing and packaging chips in recent years. Chip companies such as Infineon Technologies, NXP Semiconductors and STMicroelectronics are among the leading suppliers with factories in the country.

There is hope that the situation will improve in the fourth quarter, Källenius said. However, he expects demand for chips to impact the industry next year as well negatively. A Japanese chipmaker that supplies Toyota predicted last month that supplies scarcity would persist through 2022.

“Semiconductor supply remains very volatile and tight in the third quarter, but we hope for a gradual recovery towards the end of the year,” said Volkswagen purchasing chief Murat Aksel. According to him, the automotive industry needs about 10 percent more production capacity for chips worldwide.

BMW boss Oliver Zipse is also counting on the shortages to persist for a long time to come. “We said a few weeks ago that the second half of the year was going to be tougher, and that’s what we see now,” Zipse said. “It is more difficult, and the problem will continue for many months.”

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