Porsche Could Enter Crisis Mode This Year

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Along with Volkswagen and Audi.

It seemed as if the Volkswagen Group's three star brands were semi-immune to the semiconductor chip shortage crisis. Standing in stark contrast to their American rivals, German automakers like the VW Group, BMW, and Mercedes-Benz weathered the crisis far better for months. But now their chip stockpiles are beginning to run low and this means troubling times ahead if they can't be replenished. Per Reuters, those VW brands are worried the chip shortage could intensify in the coming few months and this would seriously hurt profits.

"Although there are signs that the supply bottlenecks for semiconductors are beginning to ease, we expect a very challenging third quarter from a supply perspective," said Alexander Seitz, the VW brand's chief financial officer.

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For the first half of this year, the automaker managed to achieve record profits, especially for high-margin vehicles from Audi and Porsche. The all-electric Porsche Taycan, for example, continues to be extremely popular. In spite of all this success, we are well-advised to keep both feet on the ground," Porsche CFO Lutz Meschke added. "Because regardless of the uncertainties of the coronavirus pandemic, the continuing tense situation on the semiconductor market could become noticeable in the third quarter."

Last month, we reported that most of BMW's facilities in Europe have been struck by a lack of chips, meaning around 10,000 vehicles cannot be fully assembled.

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It remains unknown whether its Spartanburg, South Carolina facility, home to its extremely popular SUVs, is suffering from the same problem. There's a high likelihood it will sooner or later. Replenishing the auto industry's chip supplies is not a simple process. These thumbnail-sized chips are complicated to build.

Setting up additional factories and increasing output at existing ones, which are mainly in Asia, takes time. Analysts don't believe things will be back to semi-normal until later next year. Until then, automakers like the VW Group will have to hang on and find creative ways to keep those assembly lines moving.

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