- Compression of chip supply worsens
- The problems are expected to continue in 2022
- Disruptions affecting production, sales
LONDON, Aug. 3 (Reuters) – BMW (BMWG.DE) and Stellantis (STLA.MI) became the last major automakers to warn on Tuesday that the global semiconductor chip shortage that plagued the industry this year will continue throughout 2021 and beyond, hitting production and sales.
Automakers, forced by the COVID-19 pandemic to close factories last year, face stiff competition from the sprawling consumer electronics industry for chip shipments, affected by a series of supply chain disruptions during the pandemic.
Automobiles have become increasingly dependent on chips – for everything from computerized engine management for better fuel economy to driver assistance functions such as emergency braking.
Chip-hungry, automakers focused production on higher margin models and benefited from higher vehicle prices amid low inventory for consumers.
Stellantis CFO Richard Palmer said on Tuesday that the world’s fourth largest automaker did not expect an improvement in chip supply until the fourth quarter, with an expected total production loss of around 1.4 million vehicles in 2021.
BMW, which has so far been relatively less affected by the chip shortage than some of its peers thanks to strong supplier relationships, has also warned that the second half of the year will be more difficult for the German luxury car maker. Read more
“The longer the supply bottlenecks last, the more tense the situation is likely to become,” BMW CFO Nicolas Peter said in a statement. “We expect production restrictions to continue into the second half of the year and therefore a corresponding impact on sales volumes.”
Other automakers from Tesla (TSLA.O) to Ford Motor Co (FN) have warned that for the foreseeable future, the lack of chips is the main retarder.
“While we are building cars at full speed, the global chip shortage situation remains quite severe,” Tesla CEO Elon Musk said last week.
German chipmaker Infineon Technologies (IFXGn.DE) also painted a grim picture on Tuesday, saying it was battling extreme stress in its markets as the latest wave of COVID-19 cases disrupt production in Asia and that stocks hit historic lows. Read more
“The rebound in global auto markets continues to be hampered by acute supply limitations across the value chain,” Infineon CEO Reinhard Ploss told analysts. “All in all, it will take time to find a balance between supply and demand.”
“In our opinion, it will take until 2022,” added Ploss.
The Ifo economic research institute said on Tuesday that the German auto industry and its suppliers were facing the worst chip shortage in 30 years. A survey showed that 83% of businesses were affected, up from 65% in April.
“This leads to production stoppages,” said Oliver Falck, researcher at Ifo. “Semiconductor shortages will persist for some time to come.”
French automotive lobby group CCFA-PFA on Sunday warned that the global chip shortage and a new wave of coronavirus infections are hurting the prospects of a strong rebound in the French auto market. Read more
Additional reporting by Douglas Busvine Editing by Tomasz Janowski
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