Longer Summer Break at Volkswagen Factories Due to Chip Shortage

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Volkswagen is forced to give some of its staff a longer summer holiday due to the acute shortage of computer chips. As a result, the factory in Wolfsburg, the largest branch of the German car group with 60,000 employees, will only be able to operate with a limited capacity next week.

 

Subsidiary brand Audi has to extend the traditional summer break in two of its German factories by a week. Those branches will therefore not produce anything at all next week.

The Germans are far from the only ones in the industry to have to cut production significantly. Rival Toyota, for example, also announced that it would temporarily suspend production at 14 of its Japanese factories. As a result, the production target for September has been reduced by 40 percent. In addition, several car manufacturers have already issued warnings that they are unlikely to meet previously issued sales forecasts.

The chip shortage has arisen because there was much more demand for things like laptops, computers, and mobile phones during the corona pandemic for people who work from home. Experts have indicated that the chip shortage could continue well into 2022, despite chip manufacturers doing everything they can to ramp up production.

In particular, the car industry is being hit hard because car companies scaled down their production and ordered fewer new chips at the time of the first corona dip. By the time the market picked up again, chipmakers had received so many other orders that long lead times had arisen for the chips from the car manufacturers.

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