How carmakers clash with global chip shortages

Drivers at car manufacturers such as Volkswagen AG and General Motors Co. was excited about the recovery in the industry in the early fall. Demand returned due to the lowest pandemics, and their factories buzzed again.

Then came the warnings. Like that in a Skype call on November 12 between VW’s logistics chief and officials at auto parts supplier Continental AG. The supplier said it would not supply a range of core components needed by VW due to a global shortage of semiconductors, people familiar with the call said.

Other car manufacturers receive similar warnings from suppliers.

In December, the parts of Continental, Robert Bosch GmbH and other suppliers dried up so much that VW announced that production of top-selling brands such as Audi and its namesake VW brand would stop at plants in Europe, China and North America. Audi, citing a shortage of chips, has plagued 10,000 factory workers for the first time since the spring lockout. Ford Motor Co., Honda Motor Co. and others soon reduced the production of vehicles from large pickups to compact sedans.

Continental began informing customers in the fourth quarter about supply chain issues, a company spokesman said, declining to comment on specific customers. Bosch declined to comment on the exchange with suppliers. VW, GM, Ford and Honda have said they are closely monitoring the situation and limiting its impact.

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