Chip shortage will not end this year says VW

German car manufacturer Volkswagen does not expect the global shortage of semiconductors to end this year.

However, it should further ease slightly in the second half, according to board member.

“The volatile situation will affect us at least beyond the first half of this year,” Murat Aksel, the head of procurement on the Volkswagen board said in an interview with Automobilwoche.

Carmakers around the world have been hit by a shortage of semiconductors caused by COVID-19 supply-chain disruptions as well as soaring semiconductor demand at consumer electronic companies.

Aksel said there were clearly structural issues at play, with demand set to continue to rise in the car-making industry.

As such, instead of looking at claiming damages from suppliers behind on chip deliveries, the focus was on working closely with them to ensure better availability, he said.

It should become easier to make reliable predictions in 2023, when more semiconductor production capacity comes online, he said.

VW’s comments come after the Society of Motor Manufacturers and Traders (SMMT) recently said that global semiconductor chip shortage will continue to hurt UK car sales throughout this year and into 2023 after making a serious dent in vehicle supply in 2021.

The SMMT also said that around one in six new cars sold in Britain in 2021 was either battery electric (BEV) or a plug-in hybrid (PHEV) and overall new car registrations inched up around 1 percentage point to 1.65 million units versus 1.63 million in 2020.

“Not a great year, coming on the back of an equally poor year,” SMMT CEO Mike Hawes said, referring to the impact of the chip shortage on sales which crimped a post-pandemic recovery.

The shortage of chips, used in everything from brake sensors to power steering to entertainment systems, has led automakers around the world to cut or suspend production, pushing up both new and used vehicle prices amid robust demand from consumers.

Hawes said the average vehicle requires between 1,500 and 3,000 semiconductor chips.

“We think demand is still there and demand is still strong,” Hawes said. He added that the general view was that the chip shortage would undermine the market over the course of 2022 and this would “flow through to 2023”.

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