Audi manager expects ongoing chip shortage in German car industry

Semiconductor shortages that have created bottlenecks for Germany’s car industry will take years to resolve despite chipmakers’ plans to build factories in the country, a senior Audi manager was quoted as saying on Friday.

German automakers and electronics producers have been hit hard by manufacturing delays, caused by a global shortfall of chips. Executives and policymakers are re-thinking supply lines and trying to reduce reliance on a handful of Asian and U.S. chip suppliers.

Berlin has been courting the world’s largest contract chipmakers with billions of euros in subsidies. Chipmakers such as America’s Intel and Taiwan’s TSMC this year announced plans to build factories in Germany.

“It takes years, after all. It’s about billions of dollars are being invested,” Renate Vachenauer, head of procurement at Volkswagen-owned Audi, was quoted as saying by Augsburger Allgemeine newspaper.

Vachenauer said carmakers could ease the bottlenecks by reducing the varieties of chips used from the 8,000 different types in vehicles today.

“We have to use many levers to stabilize the supply of semiconductors and also stock up on the broker market to some extent,” she added.

Dunstan Power, Managing Director of electric vehicle charging consultancy, Versinetic, has said this about the news:

“Whilst acknowledging the challenges the German car industry faces due to semiconductor shortages, I remain optimistic. We are steadily emerging from this shortage, with lead times returning to customary levels, reflecting the global supply chain’s resilience.

”There are also proactive measures being taken globally to address the situation, which are promising. The establishment of additional fabrication plants in Europe and North America is a significant step forward. The recent announcement by US President Joe Biden of a substantial $166 billion investment in semiconductor plant projects further emphasises the global commitment to strengthening the semiconductor supply chain.

”Although some German car industry analysts express concerns over component availability, I am confident that through combined industry efforts and adaptability, we will navigate these challenges. The suggestions by Ms. Vachenauer, such as reducing chip varieties, further indicate potential avenues for stabilisation.

”I am encouraged by the ongoing developments and believe in our collective ability to drive the industry towards a brighter future.”