Chip Shortage May Halt Production in VW’s Skoda… Again

Due to the global shortage of chips hobbling the automotive sector, the Czech Republic’s biggest exporter Skoda Auto, which is part of Volkswagen Group, may be forced to significantly reduce or even halt production starting on October 18 until the end of the year, Reuters reports.

Skoda Auto spokesman Tomas Kotera stressed that not even Skoda Auto is able to avoid this global crisis in which carmakers are struggling with a shortage of semiconductor chips due to the post-pandemic rise in demand.

The main reason for the halt in production, according to Kotera, is the large number of unfinished vehicles waiting for chips so the company will focus first on finishing these vehicles so they can be delivered to customers at the soonest.

Skoda, at the same time, remains committed to maintaining the jobs and wages for its 35,000 workers, predicting gradual calming of the chips’ issue in the second half of 2022.

This is second time in less than a month Skoda’s forced to halt production after it stopped production for a week on September 16 at Czech plants due to the unprecedented shortage in semiconductor microchips that has caused, among other issues, delayed car deliveries, supply shortfall in home appliances as well as costlier smartphones, businesses and consumers across the globe.

Those cancelled shifts, according to the head of Skoda’s union, Jaroslav Povsik, were to be added to planned holidays on Sept 27-28 to mark a state holiday.

The biggest so far production curbs are hampering not only the Czech economy, but others too in central Europe reliant on the auto industry, and according to economists, would definitely lead to a cut in Czech growth forecasts

The sharp drop in car production in the Czech Republic, which is home to three car manufacturers, due to extended holidays pushed down for the first time since February the Czech industrial output in August year-on-year.

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