Car manufacturers foresee improvement in production problems

It is not the order book of most car manufacturers: it is usually well filled. The main problem lies in producing enough cars to meet that demand. Not only is a shortage of microchips hampering car production, but other materials are also scarce. However, that seems to be slowly but surely improving. “The company expects the product mix to normalize in the second half of the year as the microchip situation improves and the company benefits from a strong order book,” said Arno Antlitz, Volkswagen’s CFO, in his forecast. Volkswagen saw sales decline by approximately 20 percent in the first half of 2021 compared to the first half of 2021, while profits increased by 16 percent in the same period.

Also at Stellantis people are positive about the second half of the year, even if the tone is slightly less optimistic than at Volkswagen. “We’re seeing some improvements from quarter to quarter, but it’s a slow process,” CFO Richard Palmer told Automotive News. At Stellantis, the cash register rings in any case, because in the past six months profit increased by no less than 44 percent to €12.4 billion. Turnover rose slightly less rapidly, but with a plus of 17 percent to €88 billion, there is still no real reason to complain.

Ford can also look back on a strong six months. Compared to the same period in 2021, turnover increased by 50 percent this year to the equivalent of €39.4 billion. There was also more money left at the bottom of the line: converted €686 million instead of €588 million. Ford, like Volkswagen and Stellantis, foresees improvements in the production chain due to the increasing availability of materials, but also expects to suffer from higher costs due to ongoing inflation. To somewhat parry those higher costs, Ford is reportedly going to lay off quite a few staff.

More careful

Ola Källenius, the CEO of Mercedes-Benz, still sees the chip shortage as the ‘biggest operational problem’ of the second half of the year. The uncertainty surrounding gas supplies from Russia can also throw a spanner in the works. Volkswagen previously warned about this. In the second quarter, Mercedes-Benz produced 7 percent fewer cars due to logistical challenges. Because the German brand prioritizes the production of the top models with higher profit margins, the profit figure rose by eight percent in the past quarter to €4.9 billion. Despite the challenges that the second half of this year may present, Källenius is positive. “Demand remains strong, we have a fresh portfolio of models and have further product launches planned this year.”

A manufacturer that is currently doing less well is Jaguar Land Rover. It sold 78,825 cars in the past quarter, 37 percent less than in the second quarter of 2021. Partly because of this, the manufacturer had to record a substantial quarterly loss of €619 million, compared to €131 a year earlier in the same period. million. It is noted, however, that the order book is well filled, the chip shortage is decreasing and demand is expected to remain stable.