The lack of chips remains a brake on German car manufacturers

The shortage of semiconductors remains a brake on German car manufacturers. The Association of the Automotive Industry (VDA) again lowered its annual forecast for car production to 3.6 million vehicles. That would only be an increase of three percent compared to the previous year's production, which was dampened by corona lockdowns. Two months ago, the VDA only cut its growth forecast to 13 from 20 percent. According to the current estimate, around 600,000 fewer vehicles than originally expected will roll off the assembly line. "The supply bottlenecks for semiconductors continue to be an obstacle to production," explained the VDA. Control chips have been in short supply in the automotive industry since the end of last year because the chip manufacturers mainly supply the manufacturers of smartphones, computers and game consoles due to the changed demand in the corona pandemic. For this reason, the production lines at all German car manufacturers are temporarily idle and short-time work is ordered. In the meantime, this also affects BMW, after the Munich-based company was initially little affected thanks to higher stocks. The production bottlenecks also slowed sales of new cars in Germany, while used cars are in greater demand and become more expensive, explained Peter Fuß, car expert from the management consultancy EY. "There can still be no talk of a major market recovery," he said. In June, 274,152 vehicles were registered, almost 25 percent more than in the same month last year, as the Federal Motor Transport Authority (KBA) announced. The gap compared to the pre-crisis year 2019 thus narrowed from 31 percent in May to 16 percent, explained Fuß. "The pre-crisis level remains a long way off." Despite the race to catch up after the corona shock, the number of new registrations will not reach the pre-crisis level by a long way in the year as a whole. The Association of Car Importers VDIK expects growth of six percent in 2021 compared to the previous year to 3.1 million new registrations. The volume would thus be only four percent below the long-term average.