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Supply Chain Issues Would Be Stabilized This Quarter, Hopes Daimler CEO

Supply Chain Issues Would Be Stabilized This Quarter, Hopes Daimler CEO
The German auto-making giant Daimler AG expects to stabilize its supply chain for semiconductor chips during this current quarter, said the company’s Chief Executive Ola Kaellenius.
However, the company also anticipates that it would not be until 2023 that the global auto industry will see a complete normalization of chip supplies, Kaellenius said. 
The number of Mercedes branded vehicles that the company would manufacture in the third quarter would be lower than in the same period a year ago, Kaellenius said while on a visit to oversee Mercedes operations in the United States. The third quarter last year was unusually strong for the company as it was a time when it was staging witnessing a strong rebound from the shutdowns to production earlier in last year because of the Covid-19 pandemic.
"We cannot have 100 percent certainty" about supplies of semiconductors, Kaellenius said. The efforts of the global auto industry to recover lost production earlier this year were derailed because of shutdowns this summer at Malaysian plants that process semiconductor chips for the auto industry because of a resurgence of Covid-19 infections in the country.
"We hope to be able to stabilize the situation in the fourth quarter, and take that to the next level in 2022," he said. However, according to information from major chip producers, the issues in supply could continue into 2023, he said.
"We have to stay flexible," Kaellenius said.
In addition to proposing a plan for a division of the company into a distinct luxury car firm, Daimler is also dealing with supply-chain issues. The company plans to create a distinct luxury car company - Mercedes-Benz, and another separate firm of the commercial truck brand. Mercedes-Benz is speeding up the transition to an all-electric lineup by 2030.
The EQS, an electrified top-of-the-line sedan, is also set to be introduced by Mercedes-Benz, while also getting ready to begin manufacturing next year of an electric EQS SUV at its Alabama facility next year.
"We are trying to speed up the transition" to electric vehicles, Kaellenius said.
The EQS sedan and SUV should be "profitable from the word go" in the U.S. market, he said

Christopher J. Mitchell

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