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VW, Audi and Subaru to cut production on semiconductor shortage

15 Jan 2021 / 01:33 H.

FRANKFURT AM MAIN/TOKYO: German car giant Volkswagen and its subsidiary Audi said on Thursday they would temporarily cut production and furlough workers as the auto industry suffers from a shortage of vital computer chips.

Japanese automaker Subaru Corp also said it will cut output by "several thousand" vehicles this month in Japan and the United States,citing a global shortage of semiconductors.

Volkswagen is sending roughly 8,800 employees at its plant in Emden, northern Germany, into short-time work until Jan 19, the carmaker told AFP in a statement. The plant produces VW's own-brand Passat model.

Luxury subsidiary Audi meanwhile is placing 10,000 employees on reduced hours until the end of January in Ingolstadt and Neckarsulm, both in the south of the country, the company told DPA news agency.

Subaru will adjust production and reduce output at factories in Gunma, Japan, a company spokesman said without specifying exactly how many fewer cars will be made.

The company later said that factories in Gunma will be halted temporarily for two days from Friday because of supply constraints.

Subaru will also reduce output at its Indiana plant, the spokesman said, adding that the company is examining whether further production cuts will be needed from February.

Global carmakers have been hit by a scramble for semiconductors as demand rebounds from the coronavirus crisis.

Semiconductor shortages have hampered auto production across the industry in recent weeks.

When car sales fell at the start of the Covid-19 crisis last spring, many chip manufacturers switched production to consumer electronics, which saw rising demand as the pandemic kept people at home.

The auto market has however since seen a rebound in sales, leading to critical bottlenecks in the supply chain.

Ford and Toyota said earlier this week they were slowing down or even stopping production at US factories due to the shortfall.

"The limited supply of semiconductors due to rapidly recovering car markets is causing considerable disruptions in worldwide vehicle production across all manufacturers," VW said in the statement.

"Countermeasures and alternatives are continuously being examined in order to limit the effects of the supply bottleneck and thus the number of vehicles affected."

VW had already said on Wednesday it would stop production for several days at its main Wolfsburg site due to the shortage that affected its Tiguan and Touran models.

Subaru rival Nissan Motor Co Ltd plans to reduce production of the Note, a hybrid electric car, at its Oppama Plant in Kanagawa prefecture, Japan, while Honda Motor Co said on Jan 8 that its domestic output could be affected by a shortage of chips. – AFP, Reuters

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