Executives at car manufacturers such as Volkswagen AG and General Motors Co. were optimistic about the industry’s recovery in the early autumn. Demand recovered from pandemic lows, and their factories buzzed again.
Then the warnings came. Such as the one in a Skype conversation on November 12 between VW’s head of logistics and officials from automotive parts supplier Continental AG. The vendor said it would not provide a range of core components that VW needed due to a global semiconductor shortage, people familiar with the call said.
Other car manufacturers received similar reports from suppliers.
In December, the parts flow from Continental, Robert Bosch GmbH and other suppliers had dried up to such an extent that VW announced that it would stop production of best-selling brands such as Audi and the VW brand of the same name in factories in Europe, China and North America. Audi, citing a shortage of chips, left 10,000 factory workers for the first time since the spring shutdown. Ford Motor Co., Honda Motor Co. and others soon reduced vehicle production from large pickups to compact sedans.
Continental began notifying customers of supply chain issues in the fourth quarter, a company spokesperson said, who declined to comment on specific customer calls. Bosch declined to comment on exchanges with suppliers. VW, GM, Ford and Honda said they are monitoring the situation closely and are working to mitigate the impact.