Business

Skoda to make quarter of a million fewer cars this year due to chip shortage

Volkswagen (VOWG_p.DE)-owned Skoda Auto said on Monday it will make about a quarter of a million fewer cars than anticipated this year due to a shortage of semiconductor chips.

It said it expected the chip shortage to stabilise this quarter and gradually ease in the second half of 2022.

Carmakers globally have taken sharp output cuts this year as supply chain disruptions and booming demand for consumer electronics have led to an acute shortage of chips critical in powering electronic devices.

Czech-based Skoda’s production lines came back on line on Sunday after a two-week outage caused by the chip shortage but the company said on Monday that it would still need to scale back production over the coming weeks.

“This year, the company expects that it will not be able to produce approximately 250,000 vehicles by the end of the year due to missing parts,” it said in a statement as it reported nine-month earnings results.

The shortages started having an impact on its production in the third quarter, it said.

“The company anticipates that the situation regarding the supply of semiconductors will stabilise again from the fourth quarter 2021 onwards and will then (be) gradually easing in the second half of 2022,” Skoda said.

Tata Motors Ltd (TAMO.NS), owner of Jaguar Land Rover, also said on Monday that it continued to be hit by the chip shortage and Skoda’s parent Volkswagen warned last week of the impact of the shortage on its business.

Skoda’s Chief Executive Thomas Schaeffer said in a newspaper interview published on Monday that Skoda expected to be producing at “almost full capacity” in November and December after the previous drops, if parts are available.

The company said it delivered 700,700 vehicles globally in the first nine months of this year, down 2.9% year-on-year, while deliveries outside China rose 8.5%.

Skoda reported revenue of 13.3 billion euros ($15.39 billion) for January-September, up 10.7% from a year earlier, and said operating profit nearly doubled to 900 million euros. Production was disrupted during periods last year due to coronavirus-related lockdowns.

Earlier this year the carmaker said it had tens of thousands of cars in stock that were nearly finished but were awaiting chips. Dealerships have reported months-long waits for new cars.

($1 = 0.8641 euros)