Chip scarcity forces Audi to delay manufacturing

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Audi will delay the manufacturing of a few of its high-end vehicles due to the “large” scarcity of laptop chips that’s sweeping throughout the automotive business, its chief government mentioned.

The posh automobile marque, a part of the Volkswagen group, has put greater than 10,000 staff on furlough as a result of the chip scarcity has slowed its manufacturing traces, mentioned its head, Markus Duesmann, in an interview with the Monetary Instances.

Audi will “do all the things we are able to to maintain it under 10,000 [fewer models produced] for the primary quarter,” mentioned Mr Duesmann.

The Volkswagen model itself has said it will make 100,000 fewer cars within the first quarter on account of the scarcity of chips, with Nissan, Honda, Daimler, Renault and Common Motors additionally saying they’re going through issues. Ford mentioned it will shut its plant in Saarlouis, Germany from Monday till February 19, in keeping with the DPA information company.

Mr Duesmann described the issues as “a disaster upon a disaster”. Demand for vehicles slumped for a lot of final yr due to the coronavirus pandemic, prompting auto suppliers to chop their orders for the pc chips that handle all the things from a automobile’s brakes and steering to its electrical home windows and distance sensors.

However demand for vehicles jumped unexpectedly within the closing three months of 2020, as consumers turned extra optimistic. Audi had its greatest quarter ever, largely due to a rebound in China.

“We had a really sturdy fourth quarter, however within the months earlier than it was not so clear how that will develop, and everyone was fairly stunned by the energy of the market in the previous few months,” Mr Duesmann mentioned.

This caught out automobile components suppliers, who had been pressured to compete with surging demand from the patron electronics sector, as new gaming consoles and smartphones hit the market. Carmakers themselves, having switched to just-in-time manufacturing, not maintain stockpiles of provides themselves.

Some chip corporations have now prioritised the car industry, however the lengthy lead instances in chip manufacturing imply auto suppliers must wait a number of weeks for his or her orders to be fulfilled, in keeping with business insiders.

“There’s a very lengthy [supply] chain with completely different provide ranges,” added Mr Duesmann, saying it was smaller auto suppliers that had issues maintaining with the elevated demand.

The previous BMW government, who took over at Audi final April, added that the chip scarcity would possibly “additionally have an effect on the second quarter, however solely within the order during which we construct vehicles”.

However he mentioned that as issues stand, the VW-owned marque’s general output for 2021 wouldn’t endure because of this, as Audi would make up for misplaced time within the latter half of the yr.