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Stellantis, the vehicle manufacturer created by the merger of Fiat Chrysler and PSA, has warned that global semiconductor shortages will affect production more strongly in the second quarter than in the first three months of the year.
The announcement from the world’s fourth-largest carmaker echoes forecasts Volkswagen, which has also told its brand executives to expect a worse situation in the April-June quarter.
Chip shortages were caused by an unexpected rise in car demand late last year, following falling demand due to the coronavirus crisis that coincided with a booming consumer electronics market.
Vehicle manufacturers around the world fell short and had to slow or reorganize production, reducing production to 1.3 million vehicles in the first quarter, according to IHS Markit.
Now, as an impact of the fire at the Renesas plant in Japan and cuttings a Texas due to storms starting to feed off the global shortage of supply, the industry is preparing for a longer-term impact.
Ford, which competes directly with FCA brands such as Jeep and Ram, expects to lose half of its production in the second quarter, in a setback that will cost billions of vehicle manufacturers, while Renault he also warned of the low visibility of chip supplies coming in this quarter.
Stellantis saw eight of its 44 global plants idle at some point in the quarter, most of the outages affecting its U.S. operations.
Production losses due to chip shortages came close to 190,000 units in the quarter, or 11 percent of projected production.
However, Stellantis ’revenue rose 14% to € 37 billion, due in part to higher global volumes, while the only region where vehicle deliveries fell was in North America.
Sales in Europe, South America, the Middle East and China increased, as did sales of the Maserati brand.
The group responded to the shortage by focusing on building its most profitable car models to minimize financial success and reducing the amount of inventory from dealer foreclosures.
Richard Palmer, the group’s chief financial officer, said the company “recorded strong revenue in the first quarter of 2021… Despite the headwinds of the global semiconductor crisis.”
Jefferies analyst Philippe Houchois said the group achieved “better volume than fellow generalists so far this season.”
The company expects “an improvement” during the second half of the year and maintains its expectations of a margin of 5.5% to 7.5% compared to last year’s figure of 5.3%, before the groups had merged.
Stellantis expects a saving of 5 billion euros for the merger of 50 billion euros, although no strategic plan will be drawn up for the two companies until next year.
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