Chip shortage: German car transporters fear for their existence

Automotive Industry

Source: The Handelsblatt, 2021-10-11

The serious bottlenecks in global semiconductor production plunge Germany's car transporters into an existence-threatening crisis. "Since the end of the summer break, our orders have plummeted," said Wolfgang Göbel, President of the European industry Association ECG, the Handelsblatt. There is no improvement in sight this year, and the order volume will hardly increase in 2022 either.

Göbel, full-time Director of the Mosolf car shipping company in Kirchheim / Teck, which has 3,000 employees, paints a dramatic picture for his industry: "The companies fell into the red almost overnight, the cash flow is critical for many." Not even the bankruptcy of Lehman Brothers, or the financial crisis that followed, would have given the transportation sector something like this. The situation for the car transporters is getting worse, reports the Association of European Vehicle Logistics, which he leads.

The lack of microchips is causing the number of deliveries across Europe to shrink enormously. In the UK, new registrations for all cars fell by almost 35% in September, while the number of new car registrations across Germany was 26% below the previous month. The numbers in 2021 will probably not even reach the pandemic-related weaker level of the previous year, believes the President of the Association of Car Importers (VDIK), Reinhard Zirpel.

The main cause of alarm was that Volkswagen closed its main plant in Wolfsburg for two weeks at the beginning of October - due to the lack of semiconductors. The Stellantis subsidiary Opel announced that they wanted to close the Eisenach plant for three months due to the global shortage of chips. And Skoda too, says it will “significantly reduce or even stop” production from October 18 until the end of the year. The global chip shortage in the automotive sector was to blame, said a Skoda Spokesman. 

The Czech manufacturer still has to build chips into tens of thousands of otherwise finished cars. Dealers report months of waiting times for new cars. Instead of the expected 1.3m vehicles, Skoda is expected to produce only 1.15m vehicles in 2021 - no more than in the corona year 2020.

There are also reports like this from Toyota in the Czech plant in Kolin, in Hungary from Mercedes-Benz and Suzuki, and from the Swedish manufacturer Volvo. Monthly sales there fell by 30% in September due to the lack of components.

The automobile transporters are thus trapped. Although they usually have long-term framework agreements with the vehicle manufacturers, there are no volume guarantees. As a result, some logisticians are already closing their operations one or two days a week. “In some cases, entire companies are taken off the grid,” reports the European industry Association ECG.

This situation is likely to last for months. The large German parts manufacturer Continental expects that the semiconductor shortage will last until 2022, so that the car logistics specialists are threatened with the third year of the crisis in a row.

Some of them barely made a black zero even before Corona. Market leader Schnellecke from Wolfsburg, for example, who achieved annual sales of €1.15bn with almost 20,000 employees and customers such as the VW Group, Mercedes, BMW or Fiat before Corona, closed the 2019 financial year with a net loss of €3.7m away. Marketing director Cersten Hellmich does not want to comment on the current situation.

Competitor ARS Altmann, who organises rail and truck transports for the automotive industry in Wolnzach in southern Germany and employs around 1,000 people, also just missed breakeven in 2019. In 2020, the semi-state BLG Group, which, in addition to rail loading, also organizes overseas transport for numerous car manufacturers in Bremen and Bremerhaven, also plunged deep into the red. With a turnover of €1.1bn - a good half of it from automotive logistics - the net loss for the group towered to €120m in 2020. In the first half of 2021, they only managed a black zero.

Because a recovery for the industry is becoming more and more distant, some companies could soon disappear from the market, fears ECG Association President Göbel. "The current crisis will lead to further consolidation," he is certain. So far, neither BLG nor ARS Altmann have wanted to comment on this. 

A restart in the industry would become more and more difficult. “Anyone who loses drivers or sells systems today cannot simply replace them,” explains the Mosolf executive board, whose customers include vehicle manufacturers such as Opel , Mercedes and Fiat. The container market is a cautionary example of this: the shipping companies there, too, have massively reduced their capacities after the outbreak of the corona pandemic.

Now, with the resumption of world trade, there were enormous shortages in capacity - and freight rates skyrocketing.


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