The impact of chip shortages expands, Volkswagen and BMW's core suppliers are forced to cut production
Due to disruptions in chip supply, core suppliers such as ZF Friedrichshafen for automakers like Volkswagen and BMW have reduced shifts at their factories in Germany, and Bosch is also preparing to shorten working hours, putting the supply chain at risk of another standstill. Audi has lowered its annual financial targets and warned that whether it can achieve these targets depends on the recovery of semiconductor supply
According to a report by Daily Economic News, a power struggle has recently erupted around Nexperia. As the world's largest supplier of basic semiconductor devices, Nexperia's Dutch headquarters has been forcibly taken over due to political interference, and the Chinese Ministry of Commerce has subsequently suspended its export licenses for Chinese factories. The global automotive supply chain is in crisis due to this turmoil.
Insiders revealed to the media that a key supplier for several automakers, including Volkswagen AG and BMW AG, is reducing production in Germany due to semiconductor shortages.
Insiders told the media that ZF Friedrichshafen AG has cut back on shifts at its main electric drive systems plant in Schweinfurt, as the supply of critical components has become tight. ZF supplies most major automakers, including Mercedes-Benz, Stellantis, and Ford.
A spokesperson for ZF responded to the media via email:
“We are working with our customers and suppliers to maintain a stable supply chain reliant on Nexperia products and are evaluating alternative sourcing options.”
The ZF plant in Schweinfurt employs about 8,000 people and is one of the company's most important bases globally. This plant is a core facility for ZF's production of motors and also manufactures chassis and drive systems for both fuel and electric vehicles, thus playing a critical role in ZF's electrification strategy.
In other parts of Germany, Robert Bosch GmbH is preparing to shorten working hours at its Salzgitter plant. This plant produces electronic control units and requires a continuous supply of components to maintain operations.
Audi Lowers Financial Targets for This Year
Volkswagen, which includes brands such as Audi, Lamborghini, Bentley, and Ducati, warned on Thursday that its ability to achieve its financial targets will depend on securing sufficient semiconductors. The Audi Group, part of the company, has lowered its financial targets for this year due to "intense" competition and economic challenges, including U.S. tariffs.
Audi now expects an operating profit margin of 4% to 6% for this year, down from a previous expectation of up to 7%. Audi stated that Porsche, also part of the group, has reduced its electric vehicle development targets, adding to the pressure Chief Financial Officer Jürgen Rittersberger stated in a conference call with reporters, "The current situation remains very severe." He pointed out that the brand expects to incur a loss of €1.3 billion ($1.5 billion) this year due to tariffs.
He mentioned that Audi also needs to find an alternative solution for the electric vehicle platform originally planned to be developed in collaboration with Porsche, as the launch of the cooperative platform has been delayed. Audi stated that achieving its financial goals also depends on whether it can secure enough semiconductors. Currently, chip supply is disrupted, and manufacturers face the risk of production interruptions.
In addition to the renewed supply chain risks, Audi, as part of the Volkswagen Group's business, is seeking to streamline operations to cut costs while advancing the largest new model offensive in its history. In the third quarter, Audi's operating profit margin was 2%, with a profit of €280 million. In the same period last year, the brand recorded a slight loss due to related costs from the closure of the Brussels plant
