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Car Industry Hit By Chip Shortages

The automotive industry has been hit by a shortage of semiconductors with VW and Honda cutting car production  in the face of reduced supplies.

Honda is cutting back vehicle production by 4000 units this month, mainly of the Fit subcompact car, because it can’t get ICs.

“The massively restricted supply situation for semiconductors is causing considerable disruptions in global vehicle production across all manufacturers,” says VW, “due to the Covid-19 pandemic and the resulting decline in sales in the automotive industry, leading semiconductor manufacturers switched their production to other customer industries, such as consumer electronics. In the meantime, however, the car markets have recovered significantly, especially in China. This exacerbates the current situation and the industry — and also the Volkswagen Group — lacks appropriate electronic components.”

VW warns that “the situation getting more critical as demand has risen due to the full-speed recovery of the Chinese market.”

VW is cutting back car production in Europe, China and the USA.

The Indian auto manufacturing industry has also complained about shortages,

Parts supplier Continental says “Although semiconductor manufacturers have already responded to the unexpected demand with capacity expansions, the required additional volumes will only be available in six to nine months. We therefore expect the potential delivery bottlenecks may last into 2021.”

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It is expected that the shortages will be worse next month

Source: electronicsweekly

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