Several Car Companies Said The Chip Crisis Was Easing

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According to foreign media reports, the global semiconductor shortage that has plagued the automotive industry for nearly two years is showing signs of easing, at least for now. After months of production challenges, car manufacturers such as Mercedes Benz, Daimler truck and BMW have now obtained enough chips to achieve full production.

This breakthrough came earlier than the car companies expected. At the same time, it also marks a bright spot in the historical transition to electric vehicles in an industry that has suffered from economic deterioration and inflation.

Manufacturers are cheering the improvement in chip supply, but they have not yet won the final victory. Joerg burzer, head of production and supply chain management of Mercedes, said: "we are still monitoring every week, but so far, basically on a global scale, we have not encountered any problems in production and operation." He also said that although "sometimes supply problems still occur, compared with last year's situation, the current problem is nothing".

Photo source: Mercedes Benz

Before that, even with the booming demand for automobiles, manufacturers had to cut production, because with the increasing dependence of automobiles on computers, factories around the world could not provide enough key chips for vehicles. The shutdown was once so serious that the global passenger car production showed little sign of returning to the pre pandemic level.

Now, with the improvement of chip supply, car companies are trying to digest their backlog of orders. People's attention is turning to how to maintain consumer demand in the face of inflation and higher interest rates.

According to an internal memo, Tesla CEO Elon Musk said that the company needed to cut 10% of its workforce because he had a "super bad feeling" about the economy.

However, not everyone is as pessimistic as musk. According to the Ifo Research Institute, the mood of German automakers improved significantly in May. The survey shows that automobile manufacturers are becoming more and more confident that they will be able to raise vehicle prices to cope with the soaring cost of raw materials.

Karin radstrom, head of Mercedes brand of Daimler truck company, said that the company is now getting the chips it needs to solve the backlog of orders. "The current situation is not perfect, but it is much better than last year. I am trying not to celebrate too early. We are still paying close attention to the situation," he said in an interview

BMW also expressed a similar optimistic attitude, saying that all factories have been started, and the company has not encountered any downtime due to chip supply failure. A spokesman for the company said: "at present, the situation is slightly stable." He added that BMW is still monitoring the chip supply every day and does not rule out the possibility of interruption in the coming weeks and months.

Like some other auto companies, Volkswagen Group estimates that the chip crisis will begin to ease in the second half of 2022. A spokesman for Volkswagen Group said that the company has also obtained stable supply, but he stressed that there is still great uncertainty in the coming months.

Harry Wolters, President of paccar's DAF truck division, sees the same trend. "The current supply of parts is better than expected five or six weeks ago. Therefore, we have increased our productivity in the United States and Europe," he said

However, not all car companies hold this attitude. Volvo truck said that their chip supply is still limited, and it is expected that the production in the second quarter will be affected. The research of Susquehanna financial group also shows that the delivery time of chips was not shortened in May this year, which indicates that the shortage still exists.

Last year, Ola kallenius, CEO of Mercedes, said that the company would use a more expensive semiconductor to avoid supply shortages. Jim Farley, CEO of Ford Motor Company, also said last month that the company would buy any available chips on the open market.

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