Car factories are hit by a serious crisis … Germany uses an Asian tiger


Car factories in the world in general and in Germany in particular suffer from an acute shortage of one of the components of the popular car industry, which prompted the European country to resort to one of the Asian Tigers.

Germany asked Taiwan to persuade its manufacturers to help alleviate the shortage of semiconductor chips in the auto sector, which is hindering the nascent recovery of its economy from the Corona virus.

Car manufacturers around the world are shutting down assembly lines due to problems with the delivery of semiconductors, a problem exacerbated in some cases by measures taken by the administration of former US President Donald Trump against major Chinese chip plants.

The shortages are affecting companies such as Volkswagen, Ford Motor, Subaru, Toyota Motor, Nissan Motor and Fiat Chrysler.

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German Economy Minister Peter Altmaier asked his Taiwan counterpart Wang Mi-hua to take up the issue during talks with Taiwan Semiconductor Industry Corporation, the world’s largest chipmaker and one of Germany’s major suppliers.

“I would be pleased if you could raise this issue and confirm to Taiwan Semiconductor Industry Corporation the importance of providing additional semiconductor production capacity for the German automobile industry,” Altmire wrote.

He added that the goal is to provide additional production capacities and shipments of semiconductors in the short and medium term.

He added that the German car industry was already in direct talks with the Taiwanese company about increasing shipments and that there were “very constructive” indications from the company regarding solving the problem.

Transforming chip production companies

The Taiwan Semiconductor Industry Corporation said in a statement that it attaches great importance to the chip shortage problem for auto companies.

“It is our top priority, and the Taiwan Semiconductor Industry Corporation is working closely with our customers in the auto industry to solve production capacity support problems,” she added.

And according to what the German news agency reported, the decline in car sales at the beginning of the Corona crisis in the spring of 2020 has caused many chip companies to convert their production into entertainment electronics, and car companies are suffering from a shortage of these components at the present time after the improvement in their business again.

And Bloomberg Agency said that the German company, Continental, which specializes in auto accessories, is giving priority to the supply of chips for electronic games instead of cars due to the increase in demand amid the Corona virus pandemic.

Reduced working hours

The German Volkswagen Group, the largest car producer in Europe, lost tens of thousands of its car production in China due to the global shortage of electronic chips used in the automotive industry.

Stefan Voilenstein, head of the group’s branch in China, said that the chip shortage crisis mainly affects the models that use the electronic stability program and sensor systems that work with the anti-lock braking system, in addition to affecting some other components that the German official did not specify.

“We were really affected by the crisis last December and we have lost about 10 thousand cars since that time, simply because we lost production of 50 thousand cars during December due to the lack of chips,” he said.

Last Thursday, Volkswagen announced a reduction in the number of working hours at the company’s factory in Imden, Germany, due to the lack of electronic chips, and it is expected that the procedure for reducing office hours will continue for a period of two weeks until the end of January, and this measure will apply to about 9,000 workers.

And Audi, a subsidiary of the Volkswagen Group, decided to reduce the working hours at its two factories in Ingolstadt and Nicarazolm, Germany, due to the shortage of chips for electronic control systems.

Production of the A4 limousine and A5 cabriolet will be suspended at the Neckarzolm plant, and the production lines of the A4 and A5 will stop at the Ingolstadt plant.

Japanese auto industry

The crisis is not limited to the German auto industry only, but also includes the Japanese car industry, which lost a third of its production due to the chip shortage crisis

Analysts at Mitsubishi UFJ Morgan Stanley Securities, a financial consultancy, said carmakers could lose about a third of their estimated 1.5 million car production due to the global shortage of electronic chips used in the auto industry.

Analysts expect Honda Motor to be the hardest hit, losing about 300,000 cars from its production this year, while the impact of the crisis on Toyota, Japan’s largest car producer, will be relatively slight.

Last Wednesday, Bloomberg News indicated that the world’s automakers are facing the repercussions of the second wave of the emerging corona virus pandemic, which disrupted component supply chains for several months last year.

Bloomberg added that the difference in the impact of the chip crisis on Japanese companies is due to the difference in the percentage of dependence of each company on the supply of chips coming from abroad. While Honda relies heavily on importing chips from abroad, Toyota relies more on local producers and suppliers.


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