By Victoria Waldersee
BERLIN (Reuters) – Luxury car maker Daimler said on Thursday it expects significantly lower third-quarter sales at its Mercedes unit due to global semiconductor shortages, making it the latest in a number of manufacturers to have your recipes affected.
Automakers ranging from the US group General Motors to India’s Mahindra have cut production and forecasts due to a lack of chip supply, accentuated by the resurgence of Covid-19 in key semiconductor production hubs in Asia.
“With factory closures at semiconductor suppliers in Malaysia and elsewhere, the challenge has now become even greater, so our third quarter sales are likely to be noticeably lower than in the second quarter,” said Daimler Chief Executive Ola Kaellenius , to the weekly Automobilwoche in an interview.
Kaellenius did not specify how production would be affected by shortages. The automaker cut working hours in July at factories in Germany and Hungary because of a shortage of chip supplies. Daimler was not available for comment at first.
General Motors said on Thursday that chip shortages and restrictions against Covid-19 were delaying production, with the company resorting to repairs and shipping unfinished vehicles to dealerships.
Still, Kaellenius said he was confident Daimler was better prepared than before the pandemic for supply chain problems. “We’ve made our business much more flexible and waterproof,” he said, adding that consumers were used to waiting for highly sought-after products.
Daimler has extended contracts on its leasing services to alleviate customer concerns awaiting their orders for new cars, the CEO said.
Daimler did not change its profit margin forecast for the year in July, after reporting better-than-expected second-quarter earnings. Like General Motors, it claimed at the time that it was preparing the unfinished vehicles as much as it could to be ready to fit the chips when they arrived.
Kaellenius avoided predicting an end to the shortage, pointing out that supply problems such as lockdowns in Malaysia were impossible to predict. “What is important is that there is a demand for cars,” he said. “At some point, the chip problem will be resolved.”
Daimler is expected to report its third quarter earnings on October 29.
(Reporting by Riham Alkusaa and Victoria Waldersee)
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