On Tuesday, local time, Jaguar Land Rover (Jaguar Land Rover) warned that chip shortages were expected to be more severe in the second quarter (which ended September 30) than in the previous quarter, which could lead to a 50 per cent decline in new car sales this quarter than expected.
"the current chip shortage is constantly changing and difficult to predict," Tata Motor (Tata Motors), the parent company of Jaguar Land Rover, said in a statement to the Indian Stock Exchange on Tuesday.
"chip companies' investment in new capacity will not be available until the next 12 to 18 months, when a wide range of potential structural capacity problems will be resolved, so we expect some degree of shortage to continue until the end of this year and beyond." The statement said.
The company noted that it is taking steps to mitigate the impact of semiconductor shortages and will continue to give priority to using existing chips to produce cars with higher profit margins. In this case, the company expects operating cash outflows of about $1.38 billion in the second quarter and negative earnings before interest and tax ((EBIT)).
Retail sales of Jaguar Land Rover reached 124537 vehicles in the first quarter, up 68 per cent from the same period last year. Wholesale sales surged 73 per cent to 84442 units in the quarter, but this was about 30, 000 units lower than originally planned due to chip supply constraints and the impact of the epidemic, the company said.
Thierry Bollore, chief executive of Jaguar Land Rover, said: "the current semiconductor supply problem is a major recent challenge for the industry and will take time to resolve, but we are encouraged by the strong demand as supply recovers."
Jaguar Land Rover currently has about 110000 retail orders, which the company says is its highest level in its history.
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Other carmakers, including Nissan, Hyundai and Volkswagen, have warned that shrinking inventories of new cars due to semiconductor shortages will continue to squeeze sales this summer.
South Korea's Hyundai Motor said on July 6th that its plant in Brazil would stop production for a week because of a shortage of semiconductor parts.
The shortage of automotive chips began in December and has lasted until now, and shows no sign of easing. Whether we can get a stable supply of chips has become an important factor for car companies to maintain sales. For example, with its excellent chip supply chain management strategy, BMW's sales in the United States doubled in the second quarter compared with the same period last year, far ahead of other luxury car brands.
Arix (AlixPartners), a consultancy, predicted in May that a shortage of auto parts could cost the auto industry 110 billion dollars in sales and force carmakers to revolutionize the way they buy electronic components, which are crucial to the design of modern cars.
Wakefield (Mark Wakefield), head of Aliplatinum's car business, said carmakers could no longer dominate negotiations with chip companies and battery makers.
