Renault's car production cuts double that predicted

28 October 2021

Renault cuts car production by 500,000
 
Car giant, Renault, has become the latest automotive company to cut production due to global shortages of semiconductor chips.
 
The manufacturer of the popular Clio and Megane ranges has announced it will be cutting car production by around 500,000 vehicles.
 
Analysts were surprised by the figure which is more than double the 220,000 of vehicle cuts originally predicted. 
 
However, the long-term lack of chips, which are used for many basic functions such as circuit boards, brake sensors and power steering as well as advanced features, has forced Renault and automakers around the world to cut production and raise prices.
 
During a presentation to analysts, Renault chief financial officer, Clotlide Delbos, said planning around the semiconductor shortages was "still very poor” because information coming from suppliers is “very unreliable”.
 
Delbos said she expected shortages to ease marginally by the end of the year – mostly due to the end of a Covid-19 lockdown in Malaysia, a key player in the global supply of chips. However, she maintained supply would remain limited throughout 2022. 
 
She confirmed the company was not experiencing shortages of other raw materials, but was facing price rises across the board. 
 
Worldwide shortages of semiconductors have rocked global supply chains after demand soared during the Covid-19 pandemic.
 
Remote working and national lockdowns resulted in increased demand for electronic devices, including laptops and game consoles, further leading to shortages of chips. 
 
Car sales across Europe fell 23% in September as carmakers were unable to meet this demand. Vehicle production on the Continent has now reached its lowest level since 1995.
 
Mercedes-Benz saw its sales drop almost a third in the three months to September, year-on-year, and said it would take advantage of furlough schemes at its German plant in Rastatt.
 
Mercedes-Benz UK also confirmed that some new models may initially be produced without certain features, including dashcams and in-built navigation features. The company said these elements would be retrofitted “once the components become available”.
 
The shortages are estimated to cost the car industry £80bn in revenue in 2021 alone.

Car giant, Renault, has become the latest automotive company to cut production due to global shortages of semiconductor chips

The manufacturer of the popular Clio and Megane ranges has announced it will be cutting car production by around 500,000 vehicles. 

Analysts were surprised by the figure which is more than double the 220,000 of vehicle cuts originally predicted.  

However, the long-term lack of chips, which are used for many basic functions such as circuit boards, brake sensors and power steering as well as advanced features, has forced Renault and automakers around the world to cut production and raise prices. 

During a presentation to analysts, Renault chief financial officer, Clotlide Delbos, said planning around the semiconductor shortages was "still very poor” because information coming from suppliers is “very unreliable”. 

Delbos said she expected shortages to ease marginally by the end of the year – mostly due to the end of a Covid-19 lockdown in Malaysia, a key player in the global supply of chips. She maintained supply would remain limited throughout 2022.  

Also, Delbos confirmed the company was not experiencing shortages of other raw materials, but was facing price rises across the board.  

Worldwide shortages of semiconductors have rocked global supply chains after demand soared during the Covid-19 pandemic. 

Remote working and national lockdowns resulted in increased demand for electronic devices, including laptops and game consoles, further leading to shortages of chips.  

Car sales across Europe fell 23% in September as carmakers were unable to meet this demand. Vehicle production on the Continent has now reached its lowest level since 1995. 

Mercedes-Benz saw its sales drop almost a third in the three months to September, year-on-year, and said it would take advantage of furlough schemes at its German plant in Rastatt. 

Mercedes-Benz UK also confirmed that some new models may initially be produced without certain features, including dashcams and in-built navigation features. The company said these elements would be retrofitted “once the components become available”. 

Widespread shortages are estimated to cost the car industry £80bn in revenue in 2021 alone.

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