Published in Transportation

Volkswagen blames suppliers for chip shortage

by on16 February 2021

Bad planning 

Adolf Hitler's favourite car company Volkswagen, said bad planning on the part of its suppliers has compounded a computer chip shortage blighting the global auto industry, claiming it gave ample notice that the coronavirus’ hit to car production would be limited.

The outfit was the first to warn about a chip supply crunch coming in November. The German company told its suppliers in April last year - when much of global car production was idled due to the coronavirus pandemic - that it expected a strong recovery in the second half of 2020.

Volkswagen, the world’s second-largest carmaker, says it was made aware of the chip shortage by one of its suppliers at the end of November, but that that warning came too late.

“We have communicated our demand early on. We have passed on our forecasts which have confirmed that demand, If suppliers do not trust our numbers and consult their own forecasts, we should have been informed straight away. This has not happened”, VW said.

As well as identifying potential weaknesses in the automotive supply chain, the question over who is responsible for the shortages could play a decisive role in any legal disputes down the line.

The current shortages are seen as stemming from a combination of factors, as auto manufacturers compete against the sprawling consumer electronics industry for chip supplies.

VW  now warns that chip supply will remain strained during the first half of 2021.

Fellow German companies Continental and Robert Bosch are the world’s two largest automotive suppliers.

Representatives for the two firms said they would not comment on customer relations. Continental said it has been open and transparent vis-à-vis clients at all times.

Bosch said it was doing everything to keep its customers supplied and to keep impact to a minimum, adding it was in daily contact with suppliers and customers.

Volkswagen, which so far only procures chips indirectly via suppliers, said this month it would consider sourcing straight from manufacturers to protect its supply.

Last modified on 16 February 2021
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