Stellantis, the carmaker created by the merger of Fiat Chrysler and PSA, has warned that the global semiconductor shortage will hit manufacturing harder in the second quarter than in the first three months of the year.
The warning from the world’s fourth-largest automaker echoes the predictions of Volkswagen, which has also told the brand’s executives to expect a worse situation in the April to June quarter.
The shortage of chips was caused by an unexpected rebound in automotive demand late last year, following the drop in demand from the coronavirus crisis that coincided with a booming consumer electronics market.
Car manufacturers around the world fell short and had to put production inactive or rearrange production, cutting production by 1.3 million cars in the first quarter, according to IHS Markit.
As the impact of the Renesas plant fire in Japan and the outages in Texas due to storms begin to feed on global inventory shortages, the industry is bracing for a longer-lasting 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 the carmaker billions, while Renault also warned of poor visibility of the chip supply in this quarter. .
Stellantis saw eight of its 44 global factories shut down sometime in the quarter, with most of the outages affecting its North American operations.
Production losses from the chip shortage amounted to nearly 190,000 units in the quarter, or 11 percent of planned output.
However, Stellantis’ revenues were up 14 percent to € 37 billion, due in part to higher total volumes, while the only region where auto deliveries declined was in North America.
Sales in Europe, South America, the Middle East and China all increased, as did sales of the Maserati brand.
The group responded to the shortages by focusing on building the most profitable car models to keep the financial blows to a minimum, and by reducing stock at the dealerships.
Richard Palmer, the group’s chief financial officer, said the company had “delivered strong revenues in the first quarter of 2021 … despite headwinds from the global semiconductor crisis.”
Analyst Philippe Houchois at Jefferies said the group has “outperformed its general peers” so far this season.
The company expects “some improvement” in the second half of the year and maintained its margin expectations at 5.5 percent to 7.5 percent, compared to last year’s 5.3 percent figure before the groups were united.
Stellantis expects savings of € 5 billion from the merger of € 50 billion, although a strategic plan for the two companies will not be drawn up until next year.