Chip Shortage Forces Daimler and BMW to Slow Down Automated Production

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global semiconductor shortage Demand is recovering strongly from the pandemic-induced downturn, interrupting production in the German auto industry.

Automakers Daimler and BMW said this week that a lack of sawdust is forcing assembly lines to slow or halt, reducing production by tens of thousands of vehicles and leading to longer wait times for customers.

The company said this week that BMW is temporarily halting production or reducing the number of shifts at three plants in Germany and one in the UK, as well as suppliers-owned and contract vehicle assembly plants in the Netherlands and Austria.

As a result, a BMW spokesperson said on Wednesday that production fell short with 10,000 vehicles this week, and a similar shortage is likely next week.

Daimler is trying to cope with the shortage of sawdust by prioritizing its most expensive and most profitable models. But CEO Ola Källenius said in a conference call with journalists Wednesday that even they were impressed.

Daimler had to briefly stop assembly lines at a factory in Sindelfingen, near Stuttgart, that produces new cars alongside Mercedes-Benz S-Class luxury cars. EQS electric vehicle, said Mr. Källenius. One reason was the closure of a chip supplier in Malaysia.

“We could certainly make more cars if we had more chips,” said Harald Wilhelm, Daimler CFO. He added that he could not predict when semiconductor supply would meet demand.

“We have to work with uncertainty,” Mr. Källenius told reporters.

That said, the semiconductor drought doesn’t seem to hurt profits. Wednesday Daimler reports profit 3.6 billion euros, or $4.2 billion, for the second quarter, followed by sales, up 44 percent to 43.5 billion euros. In the same period last year, when many showrooms were closed due to the pandemic, Daimler reported a loss of 2 billion euros.

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