Business Essentials for Professionals


Volkswagen Could Cut Production Due To Chip Shortage: Reports

Volkswagen Could Cut Production Due To Chip Shortage: Reports
The global shortage of semiconductors used in the auto industry will potentially force the German auto major Volkswagen AG to curb production as the company warned its managers to get ready for a larger production hit in the second quarter compared to what was faced in the first quarter, claimed a report published by the Financial Times.
"We are being told from the suppliers and within the Volkswagen Group that we need to face considerable challenges in the second quarter, probably more challenging than the first quarter," Wayne Griffiths, president of Volkswagen's Spanish brand Seat, told the Financial Times.
The global chip shortage was described by Griffiths as the "biggest challenge" being faced by the company at the present moment.
The assembly of cars at the Seat's Martorell plant outside Barcelona presently was described by him as being from "hand to mouth". The report said that the brand was deciding on which cars to manufacture only after getting a supply of chips from its suppliers.
Chip supply will continue to remain tight in the coming months the German car maker expects and has previously said that it was not possible for it to provide a guidance for the entire year on the issue. 
Last month, the company’s CEO Herbert Diess said that the global shortage of automotive semiconductors had forced the company to cancel making about 100,000 cars. That shortfall in production would not be possible for the group as a whole to make up for this year, he had also said.
Volkswagen said in an emailed statement on Saturday that the blizzards that have occurred in Texas has exacerbated the already delicate situation being faced by the company because the large chip manufacturers based in Texas were forced to either stop or curb manufacturing of semiconductors because of the inclement weather. The company could not rule out further adjustments and curb in production because of these reasons, the company also said.

Christopher J. Mitchell

Markets | Companies | M&A | Innovation | People | Management | Lifestyle | World | Misc