Currently reading: Global chip shortage: Audi furloughs 10,000 staff as production slows
Audi, Honda, Toyota, Volkswagen and others have been forced to restrict production worldwide due to shortage of semiconductors
Autocar-Felix-Page
News
3 mins read
19 January 2021

A global shortage of semiconductor computer chips continues to disrupt the automotive supply chain, with Audi's boss now admitting the problem will see huge production shortfalls and the furlough of more than 10,000 staff.

Speaking to the Financial Times, CEO Markus Duesmann said the issue was "a crisis upon a crisis", forcing production lines to slow to the point that up to 10,000 fewer Audi models could be built in the first quarter of 2021. 

Semiconductors - a crucial component for modern infotainment systems, driver aids and various electrical components - are in particularly high demand because of the pandemic-driven popularity of consumer electronic devices, including games consoles, laptops and tablets. 

This was compounded by an uptick in demand for new cars in the final three months of 2020 that beat forecasts. This meant manufacturers and suppliers were caught off-guard with late placed orders, and long lead times in chip production could mean delays of several weeks. 

Honda has paused production at its Civic factory in Swindon next week, due to a lack of the components - the third time in two months that the brand's UK line has been forced to halt by supply bottlenecks. It currently plans to restart production on Friday 22 January.

Toyota's Chinese production lines were hit last week too, while Audi and Volkswagen were reported to have reduced the working hours of nearly 19,000 German workers in light of the shortage. In total, it is esimated the whole VW Group could produce up to 100,000 fewer vehicles in this quarter. 

A VW spokesman told Autocar: "So far, we haven't quantified the full volume impact as we continue to work intensively with our suppliers to minimise shortages. However, we expect the ramifications to continue at least in the first quarter, with potential to recover any lost volume later in the year.

"Another issue we're dealing with is the second wave of the Covid-19 pandemic and how it's affecting not just our manufacturing operations but also the crucially important supply chain. Where employees or supplier staff are shielding or ill, that is of course resulting in pressure on productivity and supply – although of course our main focus is on protecting our own and our suppliers' staff.

"Like many UK companies, we made intensive preparations for Brexit, including ensuring a healthy quantity of stock in the country to cover any short-term logistic issues."

Meanwhile, in the US, Ford's plant in Louisville, Kentucky, was idled last week as the manufacturer was forced to pause production of its Escape and Lincoln Corsair models. Fiat Chrysler Automobiles took similar measures at its factories in Mexico and Brampton, Canada.

According to Bloomberg, consumer electronics producers are higher-value customers for semiconductor manufacturers as they place higher orders than car manufacturers. It estimates that a billion smartphones alone are produced each year, compared with fewer than 10 million cars. 

READ MORE

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Krisp 16 January 2021

Why Symanski's rant on Brexit? It is a global issue.

Read the article rather than just rant on.

Symanski 17 January 2021
Krisp wrote:

Why Symanski's rant on Brexit? It is a global issue.

Read the article rather than just rant on.

 

Because I can tell you right now what the current situation is in the electronics industry in the UK.

 

We had to go on to allocation with some parts, and that is not common. It has happened in the past. Now we have distributors not willing to break packs so the MOQs have gone up. One part we ordered in Q3 2020, and many distributors were quoting end of Q1 2021, or Q2. We managed to work with one of our suppliers and got that at the end of Q4. That order we shipped out at the start of the year, but we now have to fill in all the same paperwork as any sale to the EU even though it went outside. That is a major challenge for SMEs to ensure that we are getting the right commodity codes, and they are hard to figure out. Those Brexit delays added extra time on to our delivery. We have to pay for parts, and are out of pocket until after our client received the completed assemblies. Brexit adds extra time between us paying for the parts and us getting paid by our client.

 

That distributor is now telling us that there are significant delays shipping parts in to the UK. They have warehouses in the UK and EU, which operated in harmony, but now there is delays for UK buyer of some of their stock, and vice versa. They are a big company and they can not get around the problems of Brexit. Never mind the couriers can not either with the likes of DPD cancelling all shipments to the EU.

 

Remeber that practically all electronic components are manufactured outside the UK, even the EU, and that we have to account for all the components to decide if a product is British or not.

 

Companies like Honda trying to ship these completed assemblies in to their factory now face extra delays. If their production line are awaiting a circuit board and halted because of it, Brexit added an extra few days on to that delay for them. How does that help Britain?

 

Brexit cuts Britain off from its market and adds more levels of red tap. More administrative work just to do what was easy before Brexit.

 

 

 

 

xxxx 15 January 2021

How does it go Jason_recliner, "The curse of Brexit strikes again!"

Symanski 15 January 2021
xxxx wrote:

How does it go Jason_recliner, The curse of Brexit strikes again

 

Brexit has made it far more difficult for the electronics industry. Firstly there is the supply problems. Distributers are EU wide and now they have either been cut off from Britain or cut off from Europe. We have already seen some companies moving out of the UK ahead of Brexit simply because they have more customers in the EU than UK. If they are to lose one they would rather lose the UK business and not the EU business.

 

Then there is the country of origin. And that problem is still so difficult to navigate I can not even describe how we are going to solve that yet. Fabs (where semiconductors are made) are global. Practically every semiconductor is imported. And this can be the major cost of a any assembly. An example, one part on a recent build for a client is more than half the cost of the whole assembly, and that part was in short supply that it took months to source in the numbers we needed.

 

Finally, shipping. Even when shipping to a foreign destination that is not the EU the shipping companies have decided that all will have to follow the same stricter rules. This is making the process of going through to ensure that the parcels are described correctly is a nightmare. And the risk is that either the parcel is returned, or the client is incorrectly charged for duties.

 

Brexit is costing Britain sales, business, and work. That will cost British jobs. You are going to put Brits out of their livelihoods.

 

I do not think we need to explain that any further. There has been sufficient coverage of it in the news that even the thickest of Brexit supporters must now realise they were lied to.

 

 

 

JJ BLADE 16 January 2021
Now you know how us Brexit voters felt when Gordon Brown Sold our Gold off and Blair ruined our country, that's democracy, not the american banana republic type, yet the vaccine story is a success for the UK over the EU so swings and roundabouts. The fact that this country is now far too full up to enjoy driving anymore is lost on you isn't it. I have 2 classics with no electronics that I'm sticking with, I have no interest anymore in buying a new car.
Plus don't forget the spite thrown in by the EU to stop us making a success of it before we were undemocratically signed up to lose our sovreignty in the first place.
Another plus is you won't be getting a speeding ticket in the post from setting off cameras any more (although I ignored mine). So grow up and accept reality like I had to in 1997.
Symanski 17 January 2021
JJ BLADE wrote:

Now you know how us Brexit voters felt when Gordon Brown Sold our Gold off and Blair ruined our country, that's democracy, not the american banana republic type, yet the vaccine story is a success for the UK over the EU so swings and roundabouts. The fact that this country is now far too full up to enjoy driving anymore is lost on you isn't it. I have 2 classics with no electronics that I'm sticking with, I have no interest anymore in buying a new car. Plus don't forget the spite thrown in by the EU to stop us making a success of it before we were undemocratically signed up to lose our sovreignty in the first place. Another plus is you won't be getting a speeding ticket in the post from setting off cameras any more (although I ignored mine). So grow up and accept reality like I had to in 1997.

 

Normally I do not like to reply to those who are clearly deranged.  However, on the gold point, it raised about $ 3.5bn. Britain was not the only country in the world selling gold either. And we still have considerable gold reserves remaining.

 

Contrast this with Britain s GDP at $ 2.8 trillion. Three orders of magnitude higher than what the gold reserves were sold for. That is how irrelevant gold is to the economy.

 

Brexiters are penny smart, pound daft.

 

 

Citytiger 19 January 2021
Symanski wrote:

Brexiters are penny smart, pound daft.

Whereas remainiacs are just daft full stop. 

Symanski 20 January 2021
Citytiger wrote:

Whereas remainiacs are just daft full stop. 

 

Since you'll know. What are the advantages of Brexit?

 

What are the advantages of making it difficult for the EU to buy from Britain?

 

Please do a list.

 

 

LCGC 17 January 2021

Surely even the least intelligent "Remain" voter can understand that unravelling and reconfiguring the UK's relationship with the EU will take a long time and the success or otherwise of Brexit can certainly not be judged at present. There are in any case non-economic aspects to Brexit that are important to many people. What is certainly important is to respect the right of others to hold different opinions, without implying that they are stupid.

 

Symanski 20 January 2021
LCGC wrote:

the success or otherwise of Brexit can certainly not be judged at present. There are in any case non-economic aspects to Brexit that are important to many people. 

 

I love how Brexiters already have started blaming Remainers for the disaster that Brexit has turned out to be.

 

It was predicted, we told you what the problems would be, and it even surprised us that Boriss deal made those problems even worse. Country of origin makes the problems with trade with the EU even more difficult.

 

There is no advantage to Brexit, none, and how do you know? 4.5 years and Brexiters are still to list a single one that hasn't been debunked and proven to be one of Boriss or Farages lies.