Volkswagen Says Computer Chip Shortage Is Going To Hurt

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Already, production was cut by 100,000 cars in Q1.

The ongoing semiconductor chip shortage continues to greatly impact the world's leading automakers in what was supposed to be a recovery year for most. This has led to a plan for Ford Bronco production to be halted later this month and has also had an effect over at General Motors, where production of the company's popular trucks has been impacted.

Volkswagen has also been compromised by the shortage and the latest word from CEO Herbert Diess does not sound encouraging. He said that the company was now in "crisis mode" and that profits in the second quarter will be hit hard.

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Although Volkswagen recently said it intended to design its own computer chips, the company isn't there yet and those plans are specifically for autonomous vehicles. For now, VW remains at the mercy of external suppliers.

"We will do everything to offset a significant amount of the lost cars in the second half of the year," said Diess. "But the incidents in the US and in Japan will hurt us definitely. We are, for sure, in crisis mode."

The chip shortage makes this a bittersweet week for the company following its excellent Q1 results.

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Compared with the same period last year, Volkswagen Group deliveries increased by 21.2%. Deliveries of electric vehicles like the ID.3 and ID.4 jumped by more than double in the first three months of 2021.

According to Diess, the continued chip shortage resulted in approximately 100,000 fewer cars being produced in Q1 and this reduction has spilled over into Q2. "We're still tasking our supply chain people to recover the losses of quarter two, which we expect," he said.

In an attempt to secure chips over a longer period, the company is in direct communication with chip producers NXP Semiconductors and Infineon. The full extent of the shortage on VW's Q2 numbers will only be known later in the year.

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Side View Volkswagen
Source Credits: Reuters

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