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Chip scarcity forces Audi to delay manufacturing

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Audi will delay the manufacturing of a few of its high-end automobiles due to the “huge” scarcity of pc chips that’s sweeping throughout the automotive trade, its chief government stated.

The posh automotive 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, stated its head, Markus Duesmann, in an interview with the Monetary Instances.

Audi will “do all the pieces we will to maintain it under 10,000 [fewer models produced] for the primary quarter,” stated 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 dealing with issues. Ford stated 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 automobiles slumped for a lot of final 12 months due to the coronavirus pandemic, prompting auto suppliers to chop their orders for the pc chips that handle all the pieces from a automotive’s brakes and steering to its electrical home windows and distance sensors.

However demand for automobiles jumped unexpectedly within the closing three months of 2020, as patrons grew to become 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 all people was fairly shocked by the power of the market in the previous couple of months,” Mr Duesmann stated.

This caught out automotive elements suppliers, who had been compelled 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 firms have now prioritised the car industry, however the lengthy lead instances in chip manufacturing imply auto suppliers should wait a number of weeks for his or her orders to be fulfilled, in keeping with trade insiders.

“There’s a very lengthy [supply] chain with totally 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 by which we construct automobiles”.

However he stated that as issues stand, the VW-owned marque’s total output for 2021 wouldn’t endure because of this, as Audi would make up for misplaced time within the latter half of the 12 months.

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