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© Volkswagen Electronics Production | January 25, 2021

VW looking to reduce financial impact of shortages

The German car manufacturer is currently in talks with its suppliers regarding possible damage claims relating to the shortage of semiconductors.

A spokesperson for the company told Reuters that minimising the effects of the semiconductor bottleneck on production is currently the top priority for Volkswagen. The German autogiant is far from the only car manufacturer feeling the effects of the shortage. Manufacturers around the world have announced reduced production volumes and some are shutting down assembly lines due to the problems in the delivery of semiconductors – which, as pointed out by Reuters, in some cases have been worsened by the former Trump administration’s actions against key Chinese chip factories. The spokesman told Reuters that the company is also looking into possible claims of damages together with its suppliers. Bosch and Continental are named among the affected companies. Worth noting is that both companies are dependent on chip suppliers in Taiwan and other Asian countries. Back in the spring of 2020, the Germany was just making its way back from the first lockdown, Volkswagen communicated to its supplier that it was ramping up production to more normal, pre-pandemic levels again. However, its chip manufacturers still shifted production to other sectors which was showing high growth rates, such as consumer electronics, which left automotive clients with an issue of undersupply, the report continues. It has previously been reported, by German magazine Automobilwoche for example, that Volkswagen was negotiating with alternative suppliers to curb the issue, however, the were worries that this could lead to higher prices. Volkswagen now wants to make sure that both Bosch and Continental take a share of the burden and partly compensate the automaker for the additional costs, the report concludes.
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February 12 2021 10:46 am V18.15.24-2