Currently reading: Latest updates as semiconductor chip crisis cripples industry
Production resumes for most firms but others suffer in the end-of-year financial results

The automotive industry was severely hampered by a shortage of semiconductor chips in 2021, with impacts further exacerbated by the pandemic. 

Several manufacturers are still feeling the strain, with many believing supply issues will continue to affect the industry well into 2022. 

However, many have now moved to agree significant deals with large electronics manufacturers to ensure a consistent supply of semiconductors well into the future.  

The shortage of semiconductors initially stemmed from increased demand for personal computers, tablets and smartphones at the height of the pandemic, which largely diverted supply away from the automotive sector, and it now extends to Covid-related closures at semiconductor factories and international shipping ports.

Previously, Autocar reported that a number of manufacturers were urgently seeking to overhaul their components supply chains as a workaround to ensure continued production.

Tech firms meanwhile are investing heavily into semiconductor production. Toshiba will invest around £737 million ($1.09 billion) to increase its production capacity by almost double, building a new factory in Japan, which is due to open in March 2025. 


BMW signed a semiconductor supply deal with Inova Semiconductors and Global Foundries in December last year.

The deal will secure a supply of “several million microchips per year”. It says the chips will be used for smart LED lighting technologies in the BMW iX and other upcoming cars. 

“We're deepening our partnership with suppliers at key points in the supplier network and synchronising our capacity planning directly with semiconductor manufacturers and developers,” said Andreas Wendt, BMW’s head of purchasing and supplier network. 

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“This improves planning reliability and transparency around the volumes needed for everyone involved and secures our needs for the long term." 

BMW CEO Oliver Zipse, who is also the president of the ACEA, warned earlier this year that supply problems would continue and that “the gravity of the situation requires a strong and coordinated response across the European Union”.


Ford will cut production at eight of its North American factories this week because of chip supply constraints, Reuters has reported. The firm previously said the shortage would contribute to volume decline this quarter. 

Its Chicago, Cuautitlan and Michigan factories will be suspended and its Kansas factory will idle production of the F-150 pick-up truck. The Transit will stay at a more complete level of production. 

Ford has been hit particularly hard by the semiconductor crisis, having closed several of its factories throughout 2021. 

The Fiesta was one of its hardest-hit models, as the usually dominant supermini was knocked out of the top 10 best-selling cars in Europe. It was also the first time in 30 years that a Ford model didn't top the best-sellers list.

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Ford prioritised the vehicles it deemed most important for production, the firm told The Sunday Times, with the Focus and Fiesta most affected. 

“Part of that is that we took a conscious decision to look at our semiconductor availability and marry that up to vehicles that we knew were in high demand,” said Jay Ward, director of product communications at Ford of Europe.

Vehicles that were prioritised include the best-selling Transit and the Kuga PHEV. 

Jaguar Land Rover

Jaguar Land Rover (JLR) sales dropped in 2021. The firm has attributed this to the ongoing semiconductor shortage, but it has suggested that supply will improve in the coming weeks. 

Its sales dropped by 1.2% in 2021 as it was unable to ramp up production across its factory network, due to constrained semiconductor supplies. Supplies were improving towards the end of the year, JLR said, but anticipated supply will “continue to improve in Q4 of the fiscal year”, which ends on 21 March 2022.

JLR currently has record order bank of around 154,000 cars and has said that it has “proactively managed semiconductor supplies to maximise production of higher-margin products.” Around 30,000 orders are for the new Range Rover and 36,000 for the Land Rover Defender. 

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The firm's chief commercial officer, Lennard Hoornik, said: "Semiconductor supply challenges continue within the industry, but our wholesale volumes are improving. We look forward to completing delivery to global customers as supply improves in 2022.”


Nissan has raised profit outlooks for 2022 but has suggested that its success will be driven by volume, rather than outright sales. 

"2022 will be driven by how many cars we can make, rather than how many we can sell," Nissan chief operating officer Ashwani Gupta said in a briefing. 

Nissan CEO Makoto Uchida has said the chip shortage is “still uncertain” but the firm’s production of 3.8 million units is still on track. “Day by day we're in close discussion with the suppliers,” said Uchida, adding that Nissan’s planning ahead of time will help to make sure that it will hit its allocation. 

Nissan previously said that the automotive industry would be affected by shortages until mid-2022. 

"The pandemic has really disrupted the supply chain around the world and [the] automotive industry has been impacted much more than expected,” said Gupta. “It will take some more time to get back to normal operations."


Stellantis signed a deal with Taiwanese electronics firm Foxconn last year to design a new family of semiconductors to be implemented into its four EV platforms. Foxconn will provide more than 80% of Stellantis’s semiconductors. 

“Our software-defined transformation will be powered by great partners across industries and expertise,” said Stellantis CEO Carlos Tavares.

“With Foxconn, we aim to create four new families of chips that will cover over 80% of our semiconductor needs, helping to significantly modernise our components, reduce complexity and simplify the supply chain. This will also boost our ability to innovate faster and build products and services at a rapid pace.” 

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The deal should allow Stellantis’s growth to continue. It became Europe’s best-selling manufacturer in November, overtaking the Volkswagen Group for the first time since its inception. It claimed a 21.0% market share, largely thanks to the success of the Peugeot 208 and Peugeot 2008.

The deal with Foxconn will also involve research into reducing the complexity of semiconductors, which Stellantis believes will be important as vehicles become “increasingly software-defined”.


Tesla managed the semiconductor crisis more positively than a number of other firms last year, but CEO Elon Musk believes shortages will last through the year. 

Describing the situation in unique terms, he said: "I think there's some degree of the toilet-paper problem as well, where, you know, there was a toilet-paper shortage during Covid and, like, obviously, it wasn't really certainly a tremendous enhanced need for ass-wiping. It's just people panicking..."

Tesla also removed one of its electronic control units from the steering racks in China-built Model 3s and Model Ys to ensure that it hit Q4 sales targets, CNBC has reported.

Models affected included those shipped to customers in Australia, China, Germany and the UK. Customers weren't told about the omission, but Tesla has insisted that the removed part was a redundant back-up unit. 

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Toyota is expecting to miss its vehicle production target of nine million because of competition for semiconductors, it has said. 

The shortfall in supply meant the firm didn't have the levels required to ramp up output to offset production lost during the pandemic last year, reports Reuters. 

"Hitting the nine-million mark is going to be extremely difficult," said executive Kazunari Kamakura in an online briefing. 

Toyota has also stopped production at its Tsutsmumi factory after 14 employees tested positive for Covid-19. 

The halt in production will affect the Camry and Corolla, with the closure lasting four days. Some 1500 vehicles will be lost, reports Automotive News Europe. 

The Japanese firm has been badly hit by factory closures. Last year, production of the Land Cruiser was impacted, while its Lexus division also felt similar cuts, accounting for 14,000 lost vehicles. 

Six of its 28 factories were shut down in November last year, while production was slashed in August due to Covid-19 and a fire at one of its major facilities. 

Volkswagen Group

The Volkswagen Group will cut night shifts at its Wolfsburg factory as a result of the semiconductor crisis, Automotive News Europe has reported. 

Workers usually earn extra pay when working night shifts, but work on three assembly lines will stop from the start of quarter two. 

The move has frustrated members of the firm’s leading labour groups. Daniela Cavallo, labour leader, said: “Our colleagues are not responsible for the fact that order books are overflowing while we cannot make the vehicles because of the lack of semiconductors,” Cavallo said in the post. “We will fight for partial compensation.”


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The Volkswagen brand finished as the best-selling brand in Europe last year, despite a drop in overall sales.

“Volkswagen is continuing to press ahead with the transition to e-mobility despite the limited supply of semiconductors,” said Ralf Brandstätter, Volkswagen CEO.  

Volkswagen sales dropped by 8% in 2021 despite its rapid shift to electric cars, which the manufacturer has attributed to “the lagging supply of semiconductors,” which “caused limitations in production throughout the course of the year.” 

“Volkswagen achieved satisfactory sales under extremely challenging conditions. The massive effects on production brought on by the semiconductor situation could not be entirely compensated for over the course of the year, however,” said Klaus Zellmer, sales and marketing board member at Volkswagen. 

“Nonetheless, our record-breaking order backlog of 543,000 vehicles in Europe alone - thereof 95,000 IDs - shows clearly that the demand for Volkswagen vehicles continues to be very high,” Zellmer said. 


Porsche has a more positive outlook for 2022, predicting record sales despite global shortages. 

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"When I look at the current orders, I am confident for 2022. Growth in sales could reach a similarly high level this year as in 2021," Porsche board member for sales Detlev von Platen told Automobilwoche.


Skoda’s extended christmas break ended on 10 January because of disruptions to parts deliveries. The Czech brand suffered a 12.9% drop in sales in 2021, marking the first time that it has sold fewer than one million cars for eight years. 

Skoda boss Thomas Schäfer has predicted semiconductor supplies to improve in the second half of 2022. “The Covid-19 pandemic and the shortage of semiconductors have significantly slowed down our growth,” Schäfer said. 

“We expect the semiconductor supply situation to gradually ease in the second half of the year. I am looking ahead with confidence,” he added, stating the brand’s upcoming products and high customer demand have improved its outlook for the future. 


“2021 was not the year we expected”, said Wayne Griffiths, Seat and Cupra CEO. The Spanish company’s sales grew 10.3% last year, despite the pandemic and supply issues.

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“After working hard to fight the effects of the Covid-19 crisis, our activities were severely affected by the semiconductor shortage,” Griffiths said. “Demand for Seat and Cupra products has returned to pre-pandemic levels, and the shortage of semiconductors is creating frustration among our customers due to the high delivery times they have to face.”

Griffiths says the “progressive recovery in the supply situation” will continue into 2022 but is also optimistic for the year ahead. 

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Add a comment…
HiPo 289 8 February 2022

No menton of the fact that Tesla re-wrote software in order to utilise chips that were in stronger supply.  Probably because that would expose the fact that Autocar advertisers, the legacy carmakers, don't have the expertise to do things like that.   The other issue that this article ignores is 'Osborne's Law'.  This is the phenomenon whereby buyers put off buying a product because they are waiting for a better version to arrive on the market.  Thousands of people are now waiting for the right EV to arrive for their needs and they are not going to waste their money on another obsolete ICE car.  This is a serious problem for legacy automakers.

Peter Cavellini 14 December 2021

And, Who is really benefitting from this just now?, and why didn't they see this coming?

GlobalMarket 19 October 2021

Automobile manufacturers across the globe have anticipated huge earnings cut due to chip shortages in the automotive industry and adopted drastic measures to cope up with the situation.

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