German automaker VW may look to seek damages from its suppliers owing to the global semiconductor shortage that has resulted in major automakers scaling back production in the face of a disastrous 2020.
Volkswagen. Credit: SImon / Pixabay
Photo: Simon / Pixabay
Semiconductors are necessary for the construction of electric vehicles, but many suppliers have been saving their stocks for electronic product developers, owing to their rapidly increased demand throughout the pandemic.
Read more: Semiconductor shortage causes major automakers to cut production
Major automotive players such as VW, Ford, Toyota, Nissan and Fiat Crysler have all had to scale back production of their major brands for at least the first half of the year owing to the shortages.
The pandemic sent supply chains haywire, and many suppliers have still not recovered from the unprecedented effects coronavirus has had on industry.
A spokesman for VW on Sunday announced the automaker's intentions to seek recompense for the shortage.
“For Volkswagen, the top priority is to minimise the effects of the semiconductor bottleneck on production. We want to resolve the problem in close cooperation with our suppliers," he added.
The spokesman said he hoped this would include analysing the claims of damages with the suppliers.
Volkswagen wants to make sure that both Bosch and Continental, who supply parts to automakers, share the burden and partly compensate the company for the resulting additional costs.
Both are heavily reliant on chips from suppliers in Taiwan and East Asia.
Semiconductor manufacturers have deliberately chosen to offer their chip supplies to high-demand sectors such as PC parts or electronic devices such as tablets.
Not all automakers are having to massively scale back production.
While affected by the semiconductor shortage, Nissan will be able to continue manufacturing at nearly full capacity owing to them switching out their battery manufacturing to their plant in Sunderland.
Read more: Nissan chief hails Brexit victory as it looks to expand UK production
This will make them less reliant on parts from East Asia, unlike some of their competitors, which may allow them to bounce back quicker. It will also allow them to meet demands placed in the Brexit deal, in which companies will have to course all their batteries from within the UK and EU by 2027 or face heavy tariffs.
The automaker took the initiative but also stands to profit from Brexit.
Ashwani Gupta, the group's COO admitted the situation provided a "competitive advantage" for Nissan at a press conference last week.
With the UK pledging to ban the sale of vehicles fuelled by petrol and diesel by 2030, this shortage may prove a significant hurdle in many vehicles properly switching towards electric vehicle technology.
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