Chip shortage ails Audi, Mercedes-Benz, Suzuki – What about production in Hungary?

The coronavirus pandemic is now hindering parts supply: chips used in vehicles are harder to come by because semiconductor manufacturers allocated more capacity to meet soaring demand from consumer-electronics makers such as Apple Inc., Bloomberg reported recently.

As people in lockdown are snapping up consumer gadgets (smartphones, consoles, smart TVs, laptops) online, auto manufacturers that are lower down in importance to chipmakers, risk not getting enough goods to fuel a fledgling recovery in their own industry.

Bloomberg pointed out that chipmakers favour consumer electronics customers because their orders are larger than those of automakers. As an example, it mentioned that the annual smartphone market alone is more than 1 billion devices, compared with roughly 80 million cars.

In close co-operation with their suppliers, automakers are trying to find a solution to this problem, but they are still forced in the short term to temporarily close plants, or delay output. Chip shortages in early 2021 caused disruptions mostly in the USA, but the shortage is already affecting German manufacturing hubs too. 

Volkswagen said in December 2020 that would have to change manufacturing plans due to a shortage of semiconductors, but has only recently announced a production cut and shortened working hours.

Audi, another VW Group member, is putting on hold the production of its A4 limousine and A5 Cabriolet in its Neckarsulm plant in Germany. In Ingolstadt, it stopped two manufacturing lines producing A4 and A5 models. Short-time work for about 10,000 employees is expected to remain in place until end-January. Daimler AG also said it would introduce short-time work in Rastatt where it manufactures compact cars.

Global chip shortage is affecting Hungarian production too

The Hungarian Mercedes-Benz plant was the first in the country to announce a restart after a temporary shut-down that started on 18 December, but it added that in a couple of days they would switch off again. 

in an official statement the company stressed that suppliers globally are faced with a shortage of semiconductor parts.

It also highlighted that the great flexibility of Mercedes-Benz factories make it possible to make the necessary adjustments within a short period of time. The production programme of the plant in Kecskemét is also being adjusted to the current supply situation, it added. 

It also reminded that the Mercedes-EQ electric offensive continues and is treated as a priority within the concern. In close co-operation with suppliers the company is continuously monitoring and analysing the situation. 

At this point, it is too early to estimate far-reaching impacts

, the company replied to Portfolio's inquiry.

Production is to resume on 17 January with a night shift, as planned.

then, due to the aforementioned difficulties, production in kecskemét will be put on hold between january 20 and 30.

The local arm of Japanese carmaker Suzuki confirmed that global chip and semiconductor shortages are in fact a problem for electronics suppliers of the automotive industry and consequently to automakers, including Hungarian operations. 

Communications chief Zsuzsanna Bonnár-Csonka added, however, that 

this has not yet caused disruptions at our company. Together with our suppliers we are currently working on ensuring continuous supply for our plant.

Audi Hungaria said demand for semiconductors has increased so dramatically around the globe that this caused shortage or major delays in supply. And this is having an impact on the operation of automakers everywhere, including Audi Hungaria.

Due to a disruption in the supply of parts, we temporarily need to adjust production to this situation

, replied Mónika Czechmeister, Audi Hungaria's communications director, to Portfoio's inquiry.

She added that under current plans, engine manufacturing will be operated with reduced output and a partial cancellation of shifts over the next two weeks. Vehicle manufacturing is planned to operate in a single shift both this week and next. 

Meanwhile, the concern is doing everything to resolve the shortage of parts and minimise the impact of this supply disruption, she added.

Cover photo: Audi