Chip shortage will continue to weigh on production, industry group says


BERLIN – The German auto industry association VDA has said that a semiconductor shortage will continue to negatively impact auto production in the short to medium term.

In the organization’s mid-year conference call with reporters on Wednesday, VDA President Hildegard Müller called for an EU-wide approach to boost semiconductor manufacturing capacity .

Muller said the “exponential increase” in demand for microchips requires a long-term solution.

“The auto industry is not alone in facing this shortage, which makes the discussion more complex,” she said. “In the short and medium term, it will be difficult to find solutions.

Earlier this week, the VDA cut its forecast for production growth in Germany to 3% from 13% previously, noting that production had fallen “considerably below expectations” in recent months. He now expects 3.6 million cars to be made in Germany this year, down 400,000 units from his last forecast.

Mercedes-Benz said on Tuesday that deliveries in the second quarter were “significantly” reduced by a lack of chips. Shortages were particularly acute last month and the automaker expects the tightening of the supply chain to persist over the next two quarters, the company said in a statement announcing its first half vehicle sales. .

The VDA also cut its growth forecast for 2021 car sales in Germany to 3%, from 8%, citing production barriers posed by semiconductor shortages. The VDA now expects German sales to reach 3.15 million units this year.

The biggest obstacle for electric vehicles

On Wednesday, the VDA warned of a possible de facto European Union ban on combustion engines from 2035 and called for more investment in electric car charging stations in the bloc. The lack of electric vehicle charging stations is the biggest barrier to greater consumer acceptance of electric vehicles, Müller said.

She referred to a survey commissioned by the VDA and conducted by Allensbach, which found that around 70 percent of Germans are dissatisfied with their local charging network, and only 0.2 percent are very satisfied.

“Those who decide to buy an EV shouldn’t worry about infrastructure downtime,” she said. “Ultimately, it is the consumer who will decide whether electromobility is successful.”

She said that currently around 68% of charging points in the EU are available in just three states: Germany, France and the Netherlands.

“To reach over one million charging points for electric cars in Germany by 2030, 2,000 new charging points need to be built every week, and at least 6 million charging points are needed throughout EU, ”she said. It’s 12,000 a week, and we’re currently at 2,700 a week across the EU. This is not a good signal to send to consumers. “

Controversy over plug-in hybrids

Müller also called plug-in hybrid vehicles a good option for consumers looking for an entry point into the sustainable mobility market.

She said there are different opinions among automakers on how to proceed with plug-in hybrids, but said customers should make the decision to buy one, not the VDA.

Müller highlighted the German automotive industry’s investment of around 150 billion euros in climate-neutral mobility, new drive systems and digitization by 2025.

She called for a balanced approach to industry transformation that balances environmental concerns with economic realities. “Our industry is in the midst of the biggest transformation in its history, from digitization to the shift to electric vehicles,” she said. “Germany must create a climate neutral, digital and self-sustaining future.”

The transformation of the industry means more research is needed on alternative fuels as well as advanced software and technologies like artificial intelligence, the VDA said.

munich show

Muller dismissed fears that the next IAA Munich Auto Show organized by the VDA in September could be canceled due to the release of the Delta variant of COVID-19. She said a flexible hygiene concept that can adapt to changing situations and close coordination with city officials.

She also touched on the subject of job losses in the industry as it turns into electrification, noting that she is working closely with the Federal Employment Office to find alternative industries where people with these skills are still needed.

“We need to create new positions to reflect the new technologies that the auto industry needs,” she said. “This transformation is complex, and not everyone who works in the production of combustion engines will find a job in the new digital industry.”

Reuters and Bloomberg contributed to this report


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