Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

The semiconductor chips shortage will hit carmakers’ as well as auto dealers’ production and sales volumes in the second quarter. 


According to media reports on Monday, European carmaker Volkswagen’s SEAT plant in Martorell outside Barcelona trimmed production to the bare minimum. The unit has fallen short of 100,000 vehicles and hasn’t made up for the production loss due to the semiconductor chip shortage that continues to impact car production globally. The group had to cut production at its Porsche AG plants in the US in early April after the fallout of the semiconductor chip shortage.


The drop in vehicle production is also likely to trickle down to auto dealers, many of who reported stellar Q1 2021 earnings. Still, per media reports, retailers have also cut down on promotional and related vehicle lot costs, and are charging full price to their customers in anticipation of a fall in sales in the second quarter. Their bookings have also softened as car assembly plants have drastically cut down on their production owing to the shortage.



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