The shorage of chips and semiconductors, which is essential in the production of new vehicles, will cost the European automotive industry nearly €100 billion in 2021-2022, estimates insurer Allianz in a study published on September 13.
As a consequence of lasting supply chain disruptions following the COVID-19 pandemic, as result of this shortage of chips, nearly 18 million fewer vehicles have been produced globally, with the European automotive industry being hit especially hard by the shortages.
Between the month of January and August this year, the sale of new cars has decreased by 11.9 percent in the European Union, then to the same periods in the previous year.
These shortages have only been make worse this year by economic shockwaves from Russia’s full scale military operation against war torn Ukraine as well as China’s “Zero Covid” lockdown policies.
As per the sources, the automotive industry is partly responsible for the difficulties it is currently experiencing.
At the time of the pandemic, the industry massively decreased its spending and its stocks of precious semiconductors.
Along with this, Chip manufacturers then looked elsewhere, selling the chips to customers in the computing sector. When demand for chips for cars picked up once again, the industry was forced to make do with the little chips it had left.
In the previous year, the major car manufacturers in Belgium were forced multiple times to suspend production because of the lack of chips. Production lines at Ghent’s Volvo factory, as well as the Brussels Audi factory, were both frequently disrupted during the pandemic.
Furthermore, the European Commission recently made the announcement of its plans to stimulate the European chip manufacturing sector, investing more than €43 billion into the industry by 2030.