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: Jeep and Maserati maker Stellantis warns of worsening chip shortage

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Stellantis
STLA,
+7.03%
,
the European car maker created from the merger of France’s PSA Peugeot-Citroën and Italy’s Fiat-Chrysler, said on Wednesday that the global semiconductor chip shortage that hit the automobile industry in the first quarter will worsen in the next three months.

  • “We do expect it [the situation] to improve in the second half, but clearly I think it would be naive to expect it to just disappear,” said chief financial officer Richard Palmer, adding that “it is possible that it will leak into 2022.”
  • Despite a 14% rebound of revenue in the first quarter, the group said the shortages cut about 11% of its production during the period.
  • Volkswagen
    VOW,
    +2.88%
    ,
    Ford
    F,
    +1.27%

    and Daimler
    DAI,
    -0.41%

    issued similar warnings last week about the worsening situation. The shortages, caused last year by the unexpected strength of the electronics goods and automotive industries’ rebounds, cut global production by 1.3 million in the first quarter, according to IHS Markit.
  • A fire at a Renesas Electronics
    6723,
    +3.24%

    plant in Japan, as well as serious outages in Texas after the storms in March, have exacerbated the tensions on the global semiconductor market, and new problems — such as a drought in Thailand — are appearing.

Read: Stellantis CFO: Microchip shortage impact remains ‘controlled’

The outlook: Car makers are adapting in a hurry and can find solace in the hope that demand for their vehicles is only being delayed by a few months. But they have little visibility on whether the semiconductor industry will be able to meet demand in the next quarters.

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