Auto industry’s supply woes unlikely to be resolved in 2023 – VWSA’s Schäfer

It seems unlikely that the supply-chain issues in the global automotive industry will be resolved in the next year, says Volkswagen passenger car brands global CEO and former Volkswagen South Africa (VWSA) boss Thomas Schäfer in an Engineering News article.

He notes that the semi-conductor shortage is “still not over”, and that industry faces “incredible disruptions” in the global supply chain.

There are supply-chain choke points to and from China, as the country persists with lockdowns to execute a zero-Covid policy, with the logistics industry in Europe facing a shortage of truck drivers as many drivers from the Ukraine have been pulled into the war with Russia.

Schäfer says Volkswagen has seen cancelled shipments and plant shutdowns worldwide owing to strained supply chains, also in South Africa, despite a situation of “incredible demand”, with order books filled up “to next year”.

He notes that the German car maker receives supply reports on roughly 80 000 parts every week to determine which parts are available and which parts are in short supply, to see “if we can build cars, or not”.

Sometimes the manufacturer has to scramble to find an alternative supply source for a particular part, as a vehicle cannot be completed without 100% of its parts. Schäfer says this is a situation unlike anything he has ever experienced before, with “everyone’s nerves a bit raw at the moment”.

He also expresses concern about a possible economic storm brewing in Europe as high inflation and rising interest rates do not bode well for the near term. Europe is South Africa’s biggest new-vehicle export market. VWSA produces the Polo and Polo Vivo for the local and export markets.