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Volkswagen Warns Chip Shortage Threatens Car Production Worldwide

You are currently viewing Volkswagen Warns Chip Shortage Threatens Car Production Worldwide
  • Post category:Blogs

Volkswagen AG is dealing with a major production disruption from the carmaker that is calling a shortage of semiconductors.

Volkswagen Needs to Adjust Their Plans

The world’s largest automaker will have to adjust its first-quarter manufacturing plans around the globe. This is due to the bottleneck. In an emailed statement Friday, VW said this, without giving detailed figures. However, the number of cars affected could be in the low six-digit range. This is according to people familiar with the situation.

Volkswagen Fluid Situation with Regard to Components

This particular issue will stay fluid. This is related to the reallocation of components to stem the impact that might distort the assembly of vehicles that aren’t directly affected by the chip shortage. People were quoted that asked not to be named discussing internal deliberations. Also, a spokesman for VW declined to comment.

COVID-19 Offered Challenges to the Automaker yet They are Weathering That Storm well

In fact, the supply-chain situation could keep VW from getting off to a more seamless start with regard to next year. The Corona Virus hurt manufacturing operations during much of 2020.

The supply-chain issue could keep VW from getting off to a smooth start next year after the Corona Virus undercut manufacturing operations during much of 2020. However, the world’s best-selling automaker has dealt with the fallout from COVID-19 relatively well so far, helped by demand in China, its largest market.

Rebuilt Inventory Question and Issues

The car industry hasn’t rebuilt inventory fast enough. That is the complaint among dealers and lenders alike. Automakers have been stretched thin by pandemic-related “absenteeism” and “protocols” to protect the workers on the factory floors. This is in addition to supplier constraints.

Continental AG Weights on the Production Disruptions

Europe’s second-largest car-parts maker and one of VW’s top suppliers, Continental AG says it can’t discount product disruptions that are associated with chip shortages. Yet, the company has declined to comment on specific customers.

Long Lead Times and More

The required additional volumes will only be available with a considerable delay. This is due to the usual lead times going on in the semiconductor industry. The German manufacturer said this in an emailed statement. In fact, the potential bottlenecks can extend into 2021.

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