Semiconductor shortage impacts car production across the board

May 05, 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% of its total capacity, because of the ongoing semiconductor shortage. The car company, formed by the merger of Fiat Chrysler and the PSA Group, is not alone in this predicament - other carmakers are currently experiencing a similar situation. 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: Because not enough semiconductor components were delivered, the company could not fully utilise its production. Even though, according to the Stellantis quarterly report, the further effects of the semiconductor shortage 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 shortage. The reason: At the beginning of the Corona crisis, car manufacturers had initially been too pessimistic about their sales prospects and therefore cancelled their orders with the semiconductor industry or did not call up the promised quantities. The semiconductor industry had then understandably taken advantage of its opportunities in the booming communications and consumer electronics (including PCs) and concluded corresponding supply contracts with companies from these industries. This industry takes far larger quantities than the car industry - 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

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