VW says chip crunch may cause further production cuts

Automotive Industry

Source: Automotive News Europe, 2021-08-19

Volkswagen may need to cut production further due to a semiconductor supply crunch, the automaker said.

The auto industry is facing renewed strains after a recovery in demand stretched supply chains earlier in 2021, with COVID-19 outbreaks in Asia hitting both chip production and operations at commercial ports.

"We currently expect supply of chips in the third quarter to be very volatile and tight," VW said in answer to a request for comment by Reuters on 19 August. "We can't rule out further changes to production."

VW said it expects the situation to improve by the end of 2021 and aims to make up for production shortfalls in the second half as far as possible.

Rival Toyota will reduce global production for September by 40% from its previous plan, the Nikkei business daily reported earlier.

The latest production woes follow news that German chipmaker Infineon had been forced to suspend production at one of its plants in Malaysia in June due to a coronavirus outbreak.

Infineon CEO Reinhard Ploss said on 3 August that the automotive industry faced "acute supply limitations across the entire value chain" and it would take until well into 2022 for supply and demand to be brought back into balance.

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