Automotive Manufacturing Production Disruptions Expected Through 2021

German automaker Volkswagen and numerous suppliers announced on Monday morning that a shortage of chips used in auto manufacturing will disrupt automotive production well into next year, with chip companies saying they are raising prices and expanding their production in response.

German automaker Volkswagen and numerous suppliers announced on Monday morning that a shortage of chips used in auto manufacturing will disrupt automotive production well into next year, with chip companies saying they are raising prices and expanding their production in response.

“Although semiconductor manufacturers have already responded to the unexpected demand with capacity expansions, the required additional volumes will only be available in six to nine months. Therefore, the potential delivery bottlenecks may last into 2021,” Volkswagen said in a statement.

In an emailed statement, referring to auto production in China and around the world, a General Motors representative told CNN Business that “The chip supply for certain automotive electronic components has been affected due to uncertainties caused by the pandemic. This has led to a potential interruption in automotive production, with the situation getting more critical as demand has risen due to the full-speed recovery of the Chinese market.”

China is expected to sell more than 22 million vehicles in the first 11 months of 2020, down just 3% from the same period a year earlier.


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