Volvo suppliers can't keep up
Auto supply chain stretched as sector grows faster than expected
Automotive suppliers seek cost recovery on raw materials
Supply chain will hold, say buyers
Auto vendors reliant on small pool of customers
2 February 2011 | Angeline Albert
A shortage of car engine parts caused Volkswagen to shut down its main assembly lines in Wolfsburg in Germany on Monday.
The problem has arisen as suppliers struggled to keep pace with
rising demand from the manufacturer.
A spokesman for Volkswagen said: “It is true that we halted
our production on 31 January. This was to stabilise our material supply chain,
especially for engines that we need to fulfil the high demand in the markets
for Golf, Tiguan and Touran.”
Car suppliers have been unprepared for the upsurge in production in the
sector since the recession. In particular, there has been
rising demand for German cars in China and the US, the world’s two
biggest car markets.
the list of car manufacturers facing problems with supplies. SM reported in
December Volvo’s difficulty in getting enough components from vendors to the assembly lines.
At the time Bernt Ejbyfeldt, Volvo’s senior vice-president of purchasing, said:
“There is a problem because many suppliers did not believe that turnover would
increase so rapidly, so there is a constraint on capacity. During the financial
crisis they tried to decrease capacity and also ensure they could still run
their business. There is also a constraint on cash for a lot of suppliers. When
they saw the volume would come back they did not have the money to invest in
Nissan, too, was forced to close three factories in Japan last July for three days because of a shortage of key electronic components.