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Experts Indicate That the Chip Crisis in This Second Half Will Be Even Worse Than in the First. In Addition to Brazilian Factories Already Experiencing Shutdowns, Now Ford, Volkswagen, Stellantis, GM, and Volvo Have Also Announced Shutdowns in Their Factories in Europe and Adjacent Countries
The signs of a new crisis in the automobile industry are becoming increasingly apparent. Toyota was the first to raise the alarm, announcing a 40% reduction in production at its factories worldwide, which surprised the sector, as the brand is one of the biggest examples of how to manage the microchip crisis, prompting factories worldwide to adhere to the shutdown. Not only Toyota, but also Ford, Volkswagen, Stellantis, GM, and Volvo have announced reductions in their productions.
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New Wave of the Crisis Had Already Been Warned by Volkswagen
The new phase of the crisis is not much of a surprise for some companies, such as Volkswagen, which had already warned last month during the company’s earnings report that the lack of components in the second half of 2021 would be much worse than in the first. And what we have seen in recent days shows that Volkswagen was right in its forecast.
Ford, Volkswagen, Stellantis, GM, and Volvo announced almost simultaneously their decisions to decrease their factory productions. The reasons are the global shortage of semiconductors, which has been affecting automakers and their factories since the beginning of the year, and also the new outbreak of the Covid-19 variant in South Asia, which is directly impacting automakers.
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Volkswagen and Ford Announce Shutdown at Their Factories
A day after Toyota’s announcement, Volkswagen announced that its factory in Wolfsburg, Germany, will operate with only one shift this week, from August 23 to 27. The facility produces the Golf, the best-selling model in Europe, among other models.
The Spanish brand Seat, which belongs to the VW Group, has also partially suspended vehicle production in the outskirts of Barcelona. Ford, the American multinational, had to halt production of the F-150 this week at its facility in Kansas City, United States.
The Fiesta is also not being produced in Cologne, Germany. In the case of Ford’s factory in Europe, the pause is even more concerning as it comes right after employees return from a month of vacation.
Stellantis, GM, and Volvo Also Resort to Shutdown
Stellantis has halted its assembly lines for the Peugeot 308 for several weeks. The first shutdown was at the factory near Sochaux, and now it is at the one in Rennes, in western France, where about 2,000 employees work. Stellantis’s factory, which produces the Peugeot 5008 and Citroën C5 Aircross, will operate partially this week. GM has suspended production of the Bolt EV and UEV models in Orion, United States.
Other facilities have also been affected, such as Lasing Delta Township, which will resume operations around September 6, after being idle since July 19. Volvo will halt production at its factory in Gothenburg, in its home country, from August 30 to September 3, after already having undergone shutdowns weeks earlier. According to Bjorn Annwall, CFO of Volvo, the basic outlook is that the chip crisis will not provide any kind of respite in the upcoming days, causing instability in sales compared to last year.
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