European carmakers say action is needed to avoid a repeat of the ongoing semiconductor shortage

Tue 26 Oct 2021
Posted by: William Barns-Graham
Trade News

car manufacturing

European countries need to invest in semiconductor production to guard against the shortages that have wreaked havoc in their automotive sectors, carmakers have warned.

The car industry’s European lobbying organisation, the ACEA, has written to the European Commission saying the industry is facing “severe and immediate consequences” due to shortages.

ACEA chair Oliver Zipse, who is also chief executive of BMW, told the Commission that a “concerted European initiative” is needed to establish European production to rival Asian chip manufacturing, reports the FT.

Missed targets

The association expects the global chip shortage to stretch into 2022, causing members to miss production forecasts, according to a document seen by Bloomberg News.

“Car production volumes in Europe will likely be substantially lower than expected this year and next,” the group told the European Commission. “Supply will not be in line with demand.”

UK sales down a third

The UK also saw its weakest new car sales in September since 1999, the Society of Motor Manufacturers' and Traders (SMMT) told Sky News.

Sales were down by 34.4% due to the chip shortages, resulting in just 215,312 new vehicles being registered.

The SMMT has estimated that the chip shortage will result in a reduction of 100,000 in new vehicles being made in the UK.

Tech alliance stumbles

The US and EU are trying to tackle their reliance on Asian chip manufacturers with a tech alliance that will help them access the required technology and talent.

Plans are also in place to build European chip factories in Germany and France, according to Politico.

Intel has announced it will spend €80bn to expand its semiconductor manufacturing capacity in Europe, but the plants will take years to build.