Semi Shortage Continues To Sting Auto Production, With VW And Toyota Cutting Output

Both VW and Toyota have announced they are temporarily cutting output due to the ongoing global chip shortage, with Volkswagen being the latest to disclose the production pause. 

VW’s main plant in Wolfsburg is only going to be running on its early shift after summer break due to the lack of supply, Bloomberg reported this morning.

Its plant in Wolfsburg is the “world’s biggest car plant” and employs about 60,000 people. Audi is also pausing production temporarily, extending its summer break by one week, the report notes. 

Global shortages of semiconductors could wind up cutting worldwide production of autos this year by about 7.1 million vehicles, Bloomberg predicted this morning. 

IHS predicts that 2.1 million units could wind up being lost in the third quarter of 2021 alone. 

There is still little in the way of normalization to be optimistic about until the second quarter of 2022, IHS estimates. 

An IHS report stated: “The situation is still fraught with challenges. We are also seeing additional volatility due to Covid-19 lockdown measures in Malaysia where many back-end chip packaging and testing operations are performed.”

Toyota also said it was planning to temporarily stop 14 plants next month while lowering its production by 40%. 

Toyota Purchasing Group Chief Officer Kazunari Kumakura said this week: “Especially in Southeast Asia, the spread of Covid and lockdowns are impacting our local suppliers.”

The rise of the Delta variant in Southeast Asia has once again slowed production, just as most countries were getting ready to “officially” re-open, on the heels of numerous vaccines becoming available.