Worldwide chip shortage is forcing Volvo Trucks to reduce production
Volvo Trucks will shut down production at its facilities worldwide for two to four weeks. ‘Our order book is well filled, but we simply need semiconductors.’
Swedish truck manufacturer Volvo Trucks has to substantially reduce its production in the second quarter due to the worldwide chip shortage. The company announced this on Monday evening. The Volvo stock plunged 8 percent in Stockholm on Tuesday.
According to spokesman Claes Elliasson, it is planned to shut down production for two to four weeks. ‘We are active in 18 countries and we still have to see what the exact impact will be in the different locations. It’s about postponement, not cancellation. Our order books are well filled, but we simply need semiconductors to finish our trucks. ‘
We will continue to run in Oostakker for the next week. Then we check day by day and week after week whether we can stay open
The branch in Oostakker, East Flanders, is also affected, spokeswoman Vera Bostijn confirms. ‘We will continue to run for the next week. Then we check day by day and week after week whether we can stay open. ‘ The production stop counts as force majeure, as a result of which the employees fall back to temporary unemployment.
Volvo Trucks does not want to make predictions about the exact impact on production and revenues. Deutsche Bank estimates that the truck builder will produce 16,000 fewer trucks in the second quarter, which represents a dip in revenues of 4 to 7 percent.
The corona crisis significantly increased global demand for chips. Lockdowns and the requirement to work from home increased demand for chips for computers, smartphones and game consoles, while the automotive industry also picked up faster than expected.