Leading German car manufacturing company- Volkswagen and its subsidiary Audi have recently announced that they would temporarily reduce their production capabilities and would temporarily lay off workers since the automotive sector is suffering from a shortage of computer chips.
As per reports, VW is sending nearly 8,800 workers at its facility in Emden, Germany, into short-time work until Jan 19, 2021. The Emden unit is known to manufacture the company’s own-brand Passat model.
On the other hand, premium car company Audi is placing over 10,000 employees on reduced working hours until the end of January 2021, in Neckarsulm and Ingolstadt region
Along similar lines, Japanese carmaker- Subaru Corp has also decided to cut its total output this month in the United States and Japan, citing a shortage of semiconductors.
In a statement, the Japanese automobile giant said that it is likely to reduce its total output at facilities in Gunma, Japan. However, the company later claimed that factories in Gunma will be paused temporarily for nearly two days from January 15, 2021, following a shortage in supply.
In addition to the above, Subaru will also work towards reducing the total output at its Indiana unit. The company is accessing if a similar production cut would be required in February 2021. The ongoing coronavirus pandemic has largely affected the automobile industry due to the shortage in availability of semiconductors.
When the sale of vehicles fell during the initial months of COVID-19 crisis, most of the chip-making companies turned to the production of consumer electronics, as its demand largely increased with people staying at homes. Over time, the automobile market has regained strength, causing bottlenecks in the supply chain.
According to recent news, prominent automobile names like Toyota and Ford announced that they are working towards reducing or even stopping the production of cars at their U.S. facilities owing to the shortfall.
As per a statement by Volkswagen, the company is expected to stop the production for many days at its main Wolfsburg factory as the shortage has affected its Touran and Tiguan car models.