Volkswagen Talks Damages Claims Against Chip Suppliers Over shortages

Volkswagen Talks Damages Claims Against Chip Suppliers Over shortages

2021-01-25 06:00:11

German carmaker Volkswagen is in talks with its key suppliers about potential damage claims due to a shortage of semiconductors, a company spokesman said on Sunday.

Automakers around the world are closing assembly lines due to semiconductor supply issues, exacerbated in some cases by the actions of the former Trump administration against major Chinese chip factories.

The shortage affects Volkswagen, Ford Motor Co., Subaru Corp., Toyota Motor Corp., Nissan Motor Co. Ltd., Fiat Chrysler Automobiles and other vehicle manufacturers.

"For Volkswagen, the top priority is to minimize the effects of the semiconductor bottleneck on manufacturing," said the Volkswagen spokesperson, adding that the company wanted to work closely with its suppliers to resolve the issue.

But the spokesperson added that this exchange would also include an investigation of claims together with its suppliers.

Affected auto suppliers include Germany's Bosch and Continental, which in return depend on chip suppliers in Taiwan and other Asian countries.

Volkswagen had notified its suppliers shortly after the initial lockdown in the spring that it was ramping up production to pre-pandemic levels, industry sources said.

Still, semiconductor manufacturers have shifted production to other high-growth industrial sectors, such as consumer electronics, leaving automotive customers with fewer chips than needed, the sources said.

Automobilwoche magazine reported that Volkswagen was in talks with alternative semiconductor suppliers, but there were concerns that this could lead to higher prices.

Volkswagen wants to ensure that both Bosch and Continental share the burden and partially compensate the company for the resulting additional costs, the magazine reports.

A spokeswoman for Bosch said the company is currently focused on maintaining supply chains as much as possible.

"We will discuss all further aspects of the semiconductor shortage directly with our customers and suppliers in due course," she added.

Continental declined to comment.

German Economy Minister Peter Altmaier has urged his Taiwanese counterpart Wang Mei-hua to convince Taiwanese chip makers to help alleviate the shortage of semiconductors in the automotive industry, hampering the fledgling economic recovery from the COVID-19 pandemic .

Altmaier has asked Wang to resolve the issue in talks with Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC), the world's largest contract chip manufacturer and one of Germany's leading suppliers.

To reduce dependence on Asian suppliers and avoid similar problems in the future, Berlin now plans to increase state aid to increase semiconductor manufacturing capacity in Germany and Europe.

(Report by Michael Nienaber, published by David Evans)

Interested in Claims?

Receive automatic alerts on this topic.


Insurance News