Global chip shortage will continue into 2022, says Tavares

by Ben Klayman

DETROIT (Reuters) – The global semiconductor shortage plaguing the auto industry is likely to continue into the next year, Carlos Tavares, chief executive of Stellantis, said on Wednesday.

These words from the boss of the world’s fourth largest automaker at an event organized by the Automotive Press Association in Detroit echo those made earlier by Daimler’s chief financial officer, Harald Wilhelm.

“The semiconductor crisis, from all I can see, and I’m not sure I can see it all, is going to easily extend into 22 because I don’t see enough signs that the additional production is coming from sources of supply in Asia will reach the West in the near future, ”said Carlos Tavares.

The global chip shortage comes as demand for cars is rebounding sharply with the global economic recovery from the coronavirus crisis, pushing up prices for both new and used vehicles.

To cope with this shortage, some manufacturers gave up some features on their models, others continued to assemble vehicles without chips and put them on hold to complete assembly later.

Stellantis, for its part, is preparing to modify the range of chips used, although visibility on the evolution of this shortage is limited, said Carlos Tavares.

The manufacturer will continue to prioritize its most profitable models with the chips it currently receives, continued the CEO of Stellantis, an approach also adopted by some competitors.

Carlos Tavares also said that Stellantis could, if necessary, increase planned investments in electrification of its range of cars beyond the more than 30 billion euros already announced until 2025.

The group could also build more than the five battery factories already planned or increase their capacity, said Carlos Tavares.

The latter also judges that the attraction of motorists for electric vehicles is intensifying with concerns related to climate change, reinforced by events such as the recent floods in Europe.

Stellantis is ahead of its plan to achieve annual synergies of 5 billion euros ($ 5.89 billion) from the merger in January of PSA and Fiat Chrysler, said Carlos Tavares.

(Report Ben Klayman, with the contribution of JosephWhite; French version Dagmarah Mackos, edited by Bertrand Boucey)

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