Technicians are working on the assembly line for the electrical identification of the German vehicle manufacturer Volkswagen. 3 cars in Dresden, Germany, on June 8, 2021.
Matthias Rietschel | Reuters
Automakers, including Ford, Volkswagen and Daimler, are still struggling to cope with the impact of global chip shortages, as executives at each of the companies warn that silicon shortages are likely to continue. feeling a problem.
Volkswagen CEO Herbert Diess, Daimler CEO Ola Kallenius and Ford of Europe Chairman Gunnar Herrmann told CNBC’s Annette Weisbach on Monday at the Munich Motor Show that it is difficult to know when the complex problem will be solved.
Volkswagen, Europe’s largest automaker, has lost market share in China as a result of the shortage of chips, Diess said.
“We are relatively weak due to the shortage of semiconductors,” he said. “We are more affected in China than in the rest of the world. That is why we are losing market share.”
Diess said his colleagues in China have been pushing for more semiconductors, and described the lack of chips as a “big concern.”
The Wolfsburg-based company hoped the semiconductor situation would improve after the summer holidays, but it hasn’t. Malaysia, where there are many Volkswagen suppliers, has been hit hard by the coronavirus in recent weeks, leading to several factory shutdowns.
Diess said he believes chip shortage problems will begin to dissipate as countries reduce Covid-19 transmission, but hopes there will be a general shortage of semiconductors for some time. “We will face a general shortage of semiconductors because the Internet of Things is growing very fast, so there will be restrictions that we will try to manage,” he said.
Crisis of raw materials
Meanwhile, Ford of Herrmann of Ford Europe estimates that the shortage of chips may continue until 2024, adding that it is difficult to pinpoint exactly when it will end.
The shortage is believed to have worsened with the move to electric vehicles. For example, a Ford Focus typically uses approximately 300 chips, while one of Ford’s new electric vehicles can have up to 3,000 chips.
Beyond the tokens, there are now other hardships that need to be addressed. Ford is facing a “new commodity crisis,” Herrmann said.
“They’re not just semiconductors,” he said, adding that lithium, plastics and steel are relatively scarce. “Find scarcity or restrictions everywhere.”
Car prices will rise as the cost of raw materials increases, Herrmann said.
Despite the imbalances, Herrmann said Ford Europe’s incoming order book was “fantastic” and that “demand is really very strong.”
It is no longer fit for purpose
Daimler’s Kallenius said he expects the third quarter to be the “middle” of the outages. “It looks like this is the quarter most affected by that,” he said.
“Hopefully in the fourth quarter we start to go up again,” Kallenius said. “But there is a level of uncertainty that we have to deal with in our production system. It has to be flexible.”
The shortage of chips has affected more than any other automotive industry. Assembly lines have been shut down and some vehicles are now shipped without semiconductor-dependent features.
In the UK, car production fell to a new low in July, marking the industry’s worst July performance since 1956.
German engineering and technology group Bosch, which is the world’s largest auto parts supplier, believes the automotive industry’s semiconductor supply chains are no longer suitable for its purpose.
Harald Kroeger, a board member of Bosch, told CNBC last month that supply chains have shrunk over the past year, as demand for chips on everything from cars to PlayStation 5 and electric toothbrushes has increased worldwide.