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Renault CEO Warns Semiconductor Crunch to Ripple Through 2022

Renault CEO Warns Semiconductor Crunch to Ripple Through 2022

Renault SA Chief Executive Officer Luca de Meo said the effects of the global semiconductor shortage will be felt through next year, a warning that doesn’t bode well for a recovery in auto production.

Major suppliers have cautioned Renault that the shortage is “a structural thing that will be with us through 2022,” de Meo said Wednesday on the sidelines of a French parliamentary hearing. “There will be tension in the system even if production capacity is improving.”

The comments indicate the supply crunch, which many carmakers including Renault expected to peak during the second quarter, could continue to weigh on auto output for longer. Daimler AG and Jaguar Land Rover this week said that sales will be further crimped on chip supply shortfalls. The British automaker flagged deliveries in the second quarter will be 50% worse than initially expected, while BMW AG on Wednesday said it may face further adjustments to production for the remainder of the year.

“We’ve managed in the first half, but of course we have lost volumes,” de Meo said. What is frustrating for the industry is that visibility on supplies “changes every week,” he said.

Mercedes-Benz, the world’s biggest luxury-car brand, said Tuesday that deliveries during the second quarter were “significantly” curtailed by a lack of chips. De Meo has said the crisis could lower Renault’s output this year by at least 100,000 vehicles, a number he declined to comment on Wednesday.

A shortage of automotive chips that began late last year as consumer demand for personal devices soared amid pandemic lockdowns has persisted through 2021. The dearth is threatening to slash $110 billion in sales from the car industry, consulting firm AlixPartners forecast in May, and has forced auto manufacturers to overhaul the way they get the electronic components.

©2021 Bloomberg L.P.