Chip Shortage To Last Into 2023, Warns BMW CEO

The head of BMW has issued a blunt outlook about the global chip shortage, warning the car industry is still at the height of chip shortages.

Reuters quoted BMW chief executive Oliver Zipse as saying on Monday during an interview with Swiss newspaper Neue Zuercher Zeitung, that supply improvements will only arrive next year.

This is in line with other assessments. In January, leading car industry trade group The Society of Motor Manufacturers and Traders (SMMT) warned the chip shortage would continue to hurt British car sales throughout 2022 and into 2023.

BMW warning

Now BMW’s CEO has echoed the SMMT prediction from earlier this year.

“We are still in the height of the chip shortage,” Zipse was quoted as saying. “I expect us to start seeing improvements at the latest next year, but we will still have to deal with a fundamental shortage in 2023.”

BMW had during its annual press briefing in mid-March also said that it expected the chip shortage to last throughout 2022.

Reuters reported that Zipse’s comments echoed similar statements on Saturday by Volkswagen’s CFO Arno Antlitz, who said he expected that supply of chips would not be able to meet demand until 2024.

There is no doubt the car industry is among the industries badly impacted by the global chip shortage.

Last August Toyota warned that its worldwide vehicle production would be slashed by 40 percent in September because of the global chip shortage.

Then last October the French car maker Renault said it expected to produce at least 300,000 fewer vehicles in 2021.

Intel boss Pat Gelsinger also said last year that while the chip ecosystem was recovering, the global supply chain is stilled stressed, and chip shortages expected to last until 2023.

Chip shortages

The chip shortage, caused by unpredictable market conditions during the Covid-19 pandemic, has forced nearly all car manufacturers to slow production.

The chip shortages have also impacted the availability and prices of computer equipment and consumer electronics.

The production cuts by many car manufacturers for new cars has, as a result, pushed up the prices of both new and second hand cars around the world.

It has also pushed the price (and availability) of consumer electronics, with high end gaming platforms that are reliant on powerful GPUs being particularly hard hit.

It may be surprising to some that cars use a large amount of chips, as they are found in everything from brake sensors, to power steering, to entertainment systems.

It should be remembered that the computer chips found in cars, vans and lorries are not considered leading edge or sophisticated.

Indeed, often these car chips are fairly old, and therefore proven and robust.

The average vehicle apparently requires between 1,500 and 3,000 of these older chips.