Persistent components shortages imply delay in car deliveries for VW
VW Group gross sales income between January and September rose to €52 billion ($51.6 billion) however international deliveries stood at 3.3m, in comparison with 3.79m in the identical interval in 2021. The carmaker mentioned that VW model’s order backlog was very excessive, at 700,000 automobiles in Europe alone, and the carmaker was working exhausting to scale back supply occasions for patrons and processing the backlog as shortly as attainable.
The scarcity of semiconductors affecting car manufacturing in Europe has resulted in historic backlogs in car supply and the disruption is forecast to final into 2023. Carmakers and suppliers are working to deal with the shortage of capability within the manufacturing of superior microchips however localised manufacturing is a good distance from assembly the wants of carmakers at present.
The EU has initiated quite a lot of initiatives to extend superior chip manufacturing, such because the Vital Tasks of Widespread European Curiosity (IPCEI) initiative. Underneath that programme, if corporations commit manufacturing of 5nm and 2nm chips with 60-80% funding, state subsidies will prime up with further funds of between 20-40%. Nonetheless, such tasks have long-term timelines, with targets as much as 2030, which doesn’t deal with the current scarcity.
“We’re making each effort to course of the order backlog that has reached a historic excessive as swiftly as we are able to in order that our clients can take supply of their new VW as quickly as attainable,” mentioned Thomas Schäfer, CEO of VW Passenger Automobiles and head of the Quantity Model group.
Unstable volumes
On a extra constructive word, VW Group reported a restoration in supply volumes within the third quarter, shifting 1.26m automobiles to market, a determine 15.3% larger than the July-September interval the earlier yr. Deliveries in September had been significantly robust, up +19% in line with VW Group.
Nonetheless, waiting for This autumn, VW mentioned “the risky components provide state of affairs and mounting stress from rising uncooked materials and power prices” would proceed to trigger issues for the manufacturing and supply of VW-brand automobiles.
“The fourth quarter will probably be particularly difficult with regard to international provide chains and components provides,” mentioned Patrik Andreas Mayer, CFO of the Volkswagen Passenger Automobiles model. “That makes it all of the extra essential to safeguard the outcome for the long run via value self-discipline and by optimising the mannequin combine.”
That mannequin combine contains VW’s electrical car vary and greater than 207,000 had been delivered within the first 9 months of this yr, led by the ID.4 and ID.5.
To safe the longer term manufacturing of EVs in Europe VW Group is group-wide initiative to localise battery manufacturing. Vertical integration of battery manufacturing inside VW Group in Europe is partially motivated by the actual fact the battery makes up round 40% of the worth of a pure EV, however battery manufacturing stays predominantly within the palms of Asian producers. Bringing that worth inhouse whereas on the identical time eradicating the dangers related to worldwide battery cell provide is a technique that may assist the carmaker overcome disruption to the worldwide inbound provide chain.
Contracts for capability
Together with shortages in provide of components, which is affecting ultimate manufacturing of the automobiles, Europe is at present struggling a crucial scarcity in capability for completed car deliveries due to driver and asset shortages. That can be hindering supply targets.
To deal with the scarcity in outbound capability, VW Group is renegotiating contracts and pricing with its completed car logistics suppliers. At this yr’s annual convention of the Affiliation of European Car Logistics (ECG), Benedict Bayer, product proprietor of the outbound order e book at VW Group Logistics, mentioned the carmaker was open to discussing the wants of its LSPs and means it labored with them sooner or later.
“If this implies we’d like to consider the content material of our contracts, we’re prepared to do that,” he mentioned.
To that finish, VW has plans to collaborate on fixing a single entry level for LSPs and yard managers to speak forecasts and order knowledge. “We’d like one communication channel for all manufacturers inside the group – a single entry level with transport suppliers and one standardised communication channel via the entire group,” mentioned Bayer.
