Vauxhall Boss Says Chip Shortage To Last Months

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Head of Vauxhall Motors warns problems for the car industry caused by ongoing chip shortage is not likely to improve this year

The chip shortage impacting the carindustry is likely to continue for the rest of the year, the head of Vauxhall Motors in the UK has warned.

Vauxhall’s managing director, Paul Willcox, told the BBC that the industry was facing a “problem” for the next two or three months.

Earlier this week carmaker Stellantis, whose brands include Citroën, Fiat, Opel, Peugeot and Vauxhall, warned it is extending production halts at a number of its factories in Europe because of the ongoing chip shortage.

Smart factories, smart factory

Chip shortages

Prior to that Toyota has revealed worldwide vehicle production would be slashed by 40 percent in September.

The car industry as a whole has been hit very hard by the chip shortage, and matters have not been helped as many car makers tended to hold small stockpiles of computer chips, and operate a ‘just-in-time’ sourcing operation for key components.

The Vauxhall factories in Ellesmere Port and Luton has been disrupted at different times because of the shortages.

And Willcox told the BBC that the effects are still being felt.

“It has obviously suppressed our ability to manufacture,” Willcox told the BBC, speaking at the Commercial Vehicle Show in Birmingham.

“If you look at the industry in the UK this month, commercial vehicle sales, which have been hugely buoyant this year – 59 percent up – this month they’re 20 percent down, and obviously a large part of that is because of supply shortages,” he reportedly said.

Willcox added that parent company Stellantis’ decision to invest £100m on building a new range of electric vans at Vauxhall’s plant in Ellesmere Port was “massively important” for the factory and its workforce.

Sourcing components

Willcox also insisted that the operating model of carmakers, utilising a just-in-time’ sourcing operation for key components, does not need to change.

“I don’t think it exposes a problem,” he told the BBC. “I think it just illustrates that when you have a crisis, you can be quite vulnerable.”

He added that the car industry is very much “based on lean manufacturing.”

“I don’t think that will change in the short to medium term – maybe one thing we need to be careful of is maintaining more stability in terms of our contractual arrangements, but I don’t see a fundamental shift in the way we manage the business,” he told the BBC.

Forrester Research warned earlier this year that it expects chip supply issues to extend through next year and into 2023.