BMW believes the global chip shortage, which currently hinders car production, will be resolved within two years. The car manufacturer points out that companies and governments are focusing on the problem. Despite this, BMW production increased in the first quarter.
Oliver Zipse, BMW’s CEO, expects the chip shortage to be a thing of the past within two years. “It is expected that supply and demand will be back in balance within two years,” he says. BMW’s estimated term is longer than that of Ford, for example, which expects the chip shortage in 2022 to no longer affect car production. Despite the continuing chip shortage, the Munich manufacturer is now benefiting from the improving car market, as worldwide sales rose by a third to 636,606 cars in the first quarter. In China, sales nearly doubled. Profit in the first quarter was also higher than expected at € 2.2 billion before tax. BMW does say that rising commodity prices pose a risk to profits for the rest of the year.
The chip shortage arose because car manufacturers had expected at the start of the corona crisis that they would buy fewer chips because production was reduced. However, the demand for cars recovered faster than expected, but in the meantime consumers also bought electronic equipment such as laptops, tablets and game consoles en masse. Together, these developments have ensured that chip manufacturers were in trouble. The issue has prompted widespread efforts to ramp up production. The European Commission wants to double the production of chips in the EU to at least 20 percent of the world supply by 2030. Europe wants to be less dependent on foreign companies for important components.