The Strategist

Volkswagen to cut production in Q2

04/26/2021 - 03:53

Car maker Volkswagen will cut production volumes due to a global shortage of microchips, the Financial Times reported, citing the company's spokesman.

"Suppliers and Volkswagen Group representatives tell us that we will face more problems in the second quarter than in the first," said the head of Spanish brand Seat, part of the Volkswagen Group. He said the lack of components was the "biggest challenge" for the company.

According to the publication, the reduction of production means a major loss for the company, whose leaders have warned of a reduction in production in the first quarter of 2021 by 100,000 cars due to lack of semiconductors. At the same time, Volkswagen noted that its production capacity would not be able to make up for the lost volume later in the year.

Automakers in other countries, including Asia and the US, are experiencing similar difficulties. Globally, it is estimated that microchip supply disruptions caused delays in production of one million vehicles between January and March. Problems in the production and supply of semiconductor components related to the pandemic were exacerbated by temporary plant shutdowns in Texas and Japan.