Executives from automakers like Volkswagen AG and General Motors Co. were optimistic about the sector’s recovery in the early autumn. Demand was recovering from pandemic casualties and its factories were buzzing again.
Then came the warnings. Like the one on a Skype call on November 12 between the head of VW logistics and employees at automotive parts supplier Continental AG. The supplier said it would not deliver a range of essential components that VW needed due to the global shortage of semiconductors, people familiar with the call said.
Other car manufacturers were receiving similar alerts from suppliers.
In December, the flow of parts from Continental, Robert Bosch GmbH and other suppliers had dried up so much that VW announced that it would stop producing top-selling brands such as Audi and its eponymous VW brand in factories in Europe, China and North America. Audi, citing a chip shortage, laid off 10,000 factory workers for the first time since the spring blockades. Ford Motor Co., Honda Motor Co. and others soon reduced vehicle production, from large pickups to compact sedans.
Continental began informing customers in the fourth quarter about supply chain problems, said a company spokesman, declining to comment on specific customer calls. Bosch declined to comment on exchanges with suppliers. VW, GM, Ford and Honda said they are closely monitoring the situation and working to limit the impact.