The chip crisis ‘disrupted’ the European car industry


The chip shortage crisis began to appear in conjunction with the outbreak of the first wave of the “Covid-19” virus during the first half of last year.

This crisis led to major problems within the mobile phone companies and the car industry, which led to a reduction in the production rate.

The German magazine “Automobile Voche” stated that the Czech “Skoda” car company, affiliated with the giant German “Volkswagen” group, will reduce the number of cars planned for production this year by 250,000 cars, due to the lack of technological chips worldwide, which is more than double the number that was The company expects it last month.

And the news agency “Bloomberg” quoted the German magazine as saying that more work periods have been canceled until the end of the year, as “Skoda” still maintains a large number of cars that have not been completed, and will focus on completing them first.

Czech company officials said the chip shortage could continue until the second half of 2022, before stabilizing again, as the recent surge in COVID-19 cases in Asia puts pressure on production.

Skoda CEO Thomas Schaefer predicted in September that his company would produce 100,000 fewer cars than planned.

Volkswagen, Mercedes of Germany’s Daimler Group and Japan’s Toyota were among the car companies hit by plant closures in Southeast Asia, where in the past few years that region has appeared to be a hub for chip testing and shipping operations.

European sales decline

After months of soaring, car sales in Europe fell in light of the fallout from the shortage of electronic chips used in the car industry.

Global auto production is suffering from a shortage of chip supplies, forcing many major companies to stop or reduce working hours in many of their factories.

The car companies initially believed that the chips shortage crisis would be in the first half of this year, but now it is continuing in the third quarter of the year, while the heads of car companies are talking about its continuation over the next year and possibly beyond.

According to data from the European Automobile Manufacturers Association, new car sales fell last August by 18% annually, after declining in July by 24%.

At the same time, sales during the first eight months of this year increased by only 13% compared to last year, which represents less than half of the increase recorded during the first half of this year, according to the “Bloomberg” news agency.

The US agency indicated that car companies are moving to focus on producing high-priced cars with greater profitability in light of the lack of chip supplies in order to achieve the highest rate of cash flows during this period.

The expectations of the German company “Continental” for auto supplies indicated the continuation of the semiconductor crisis in the auto sector next year as well, due to the lack of production capacities and high demand.

At the start of the Munich Motor Show, Conti CEO Nikolai Zeitzer said that his company expects that supply problems with these chips will accompany the auto industry next year as well.


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