Porsche recently reported that the first three quarters of 2021 had record sales. The German automaker shipped 217,198 vehicles to clients all around the world between January and September. Comparing this time to last year, there has been a 13 percent increase. While everyone recalls the first half of 2020 saw a decline in car sales, the second half of the year saw a sharp increase. The chip scarcity has been cited as the primary reason why several automakers have been recording noticeably lower sales figures this year, notably in the second and third quarters. It’s important to investigate carefully how Porsche managed to overcome that seemingly insurmountable obstacle and turn the situation around.
Porsche CEO Oliver Blume made it plain in an interview with CNBC International back in early September that customers shouldn’t anticipate getting their cars promptly despite record sales. He stressed that the length of time it takes to receive a car ordered at a dealership might be up to 6 months or even more, depending on the market sector the buyer is in. Blume anticipates that the issue will lessen “very soon” and that ordering times would last for a maximum of 3-5 months.
Alexander Seitz, the chief financial officer at Volkswagen, had already stated that there would be supply restrictions for Q3. However, compared to Skodas, Volkswagens, or many of the other brands in the Group, Porsche automobiles have significantly higher profit margins, so it only makes sense to invest more in them. That would explain why Porsche had a strong third quarter while the VW Group as a whole struggled.
Nevertheless, Porsche has been forced to get by with fewer chips than usual. In order to conserve the chip supply, it and other automakers have deleted some electronic features from their cars, including as steering columns and adjustable seats. Other features are still present in cars, but because a dummy chip is implanted, they are temporarily inoperative. Porsche intends to have dealers swap out the fake chips for real ones once the microprocessor scarcity is rectified.
Porsche’s official press release announcing its record-breaking first three quarters of 2021 detailed how demand for automobiles is rising in all sales regions around the world. With sales up 30% from Q1 through Q3 compared to previous year, the United States continues to be the leading market for Porsches in terms of growth. The greatest market, though, is China, which saw 69,789 deliveries compared to 51,615 in the US.
In the fourth quarter, the automaker anticipates a surge in orders, but only time will tell if it can manage the surge. The Cayenne has delivered 62,451 units so far this year, leading all Porsche models. With 61,944 units, the Macan isn’t too far behind.
More astonishing is the fact that the all-electric Taycan delivered 28,640 units compared to the famous 911’s 27,972 units. The 718 Boxster and Cayman sold 15,916 units in the first three quarters of this year, while the Panamera flexed its muscles with 20,275 units delivered to customers.
You might be astonished to find that the Cayenne facility, which assembles the SUV, was shut down for a week due to the chip shortage, despite the Cayenne continuing to be Porsche’s best-selling model in 2021. According to the German publication Handelsblatt, the Slovakian city of Bratislava’s Volkswagen plant was closed from April 29 to May 7.
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The CEO of Porsche warns that a “very serious” global chip shortage might have an impact on operations for months.
- His remarks follow a surprising increase in global auto sales late last year that also happened to be accompanied by a shortage of crucial semiconductor components.
- The chip-dependent automotive industry’s assembly lines were halted by supply constraints.
A “very serious” global semiconductor shortage, according to Porsche’s CEO, might have an impact on the company’s everyday operations in the upcoming months.
Porsche’s worldwide deliveries decreased as sharp drops in the United States and China exceeded an increase in Europe. Q1 icant
Porsche deliveries decreased in the first quarter as a result of the closure of dealerships due to coronavirus outbreaks in China and the loss of a number of vehicles at sea due to the sinking of a cargo ship.
The sports car manufacturer reported Thursday that during the first three months of the year, shipments for the Volkswagen Group brand fell 5 percent to 68,426 vehicles globally as major drops in the U.S. and China exceeded an increase in Europe.
Porsche shipped a record number of cars last year despite the chip scarcity that plagued the industry.
Detlev von Platen, Porsche’s head of sales and marketing, stated in a statement that “the most recent pandemic epidemic in China and other regions, as well as significant delivery-related and logistical issues, have put us under enormous pressure.”
Automakers continue to face substantial challenges due to constrained supply chains, with shortages of semiconductors being the main issue that has halted production.
Mercedes-Benz reported a 15% decline in deliveries during the first quarter, despite manufacturers’ predictions for better supplies during the second half of the year.
Global business is being hampered by the war in Ukraine being fought by Russia and the resumption of lockdowns in China to combat the coronavirus.
Sales in China, Porsche’s biggest single market, decreased by 20% as a result of government-imposed lockdowns that stopped commerce and consumer companies. The brand’s sales in the United States decreased by 25%. In Europe, deliveries increased by 18%.
The automaker, which is one of VW’s most lucrative divisions, is still working on an IPO scheduled for the fourth quarter that could value the legendary brand at up to 90 billion euros ($97.5 billion).
In light of the ongoing military events in Ukraine, von Platen stated, “We are entering the second quarter with hyper-vigilance.” “Experts in a task force continually study and evaluate the impact on our business.”
More brands in Europe are affected by the problem with component supply.
While a new, possibly much worse issue surfaced, the European automobile industry was only just able to recover from lockdowns and the ongoing chip shortage.
The invasion of Ukraine by Russia exacerbates existing parts supply problems and creates some new ones, forcing numerous auto factories to halt production.
We already know that production of the in Ukraine built electrical cable harnesses has stopped. The Volkswagen Group had to temporarily halt production at many locations due to the parts scarcity, including electric car production in Germany’s Zwickau and Dresden.
According to Reuters, even the relatively niche luxury brand Porsche has to halt the manufacturing of electric vehicles at its Stuttgart-Zuffenhausen plant in Germany.
The source claims that due to a shortage of parts, production of the Porsche Taycan family would be put on hold until the end of next week. According to the producer, just 200 Taycan vehicles can be produced per day.
Positively, manufacturing will partially resume at Porsche’s Leipzig facility on Monday “thanks to an improved supply situation” after having been temporarily interrupted.
Automotive News reports that the short-term production loss in Europe is anticipated to be between 50,000 and 100,000 units. The sanctions are predicted to have a devastating impact on the Russian car industry.
The conflict in Ukraine will also have an adverse effect on the semiconductor industry, as this country supplied at least half of the neon gas necessary to power lasers used in chip production.
“But the conflict in Ukraine will also have an impact on the semiconductor sector, which is mostly concentrated in Asian and North American “chip foundries.” The nation generates at least 50 percent of the neon gas required by the world to run the lasers that carve patterns into computer chips.
Since Ukraine accounted for 70% of neon production in 2014, when Russia seized Crimea, chipmakers have been attempting to diversify their source.”
Despite a chip scarcity, Porsche deliveries dramatically increase.
Most automakers are affected by the global semiconductor shortage, which has led to decreased shipments and production halts. Porsche saw a 13 percent gain in deliveries in the first three quarters of 2021, between January and September, whereas most automakers are seeing a fall in their deliveries. According to Porsche, 217,198 units have been delivered worldwide.
The automaker reports that although though demand for its vehicles increased in all sales regions, it was especially high in the US. Porsche’s deliveries have increased, but the carmaker still claims that the coronavirus situation is fluid and that it is having trouble finding semiconductors. With 62,451 sales, the Cayenne is Porsche’s best-selling model.
The Macan, which was delivered in 61,944 units and saw a 12 percent increase in sales, was Porsche’s second-most popular model. Unexpectedly, the third most popular model is. 28,640 units of the electric Taycan sports car were sold to consumers. Only two years after that particular model became available, deliveries of the venerable 911 had already been eclipsed. The 911 has so far supplied 27,972 units in the year’s first three quarters, which is an increase of 10%.
According to Porsche, 15,916 units of the 718 Boxster and 718 Cayman were produced. With 20,275 units sold, the four-door Porsche Panamera is still quite popular. Porsche claims to have delivered 51,615 cars in the US in the first nine months of 2021. Compared to deliveries made in 2020, the figures show a 30% rise. Porsche shipped 63,025 automobiles throughout the whole American continent, up 29% from the previous year.
It’s interesting to note that China is Porsche’s biggest single market, with 69,789 vehicles shipped, an increase of 11% from 2020. Porsche also sent 56,332 automobiles throughout Europe.
Is there a chip shortage at Porsche?
The car industry’s goals for production and sales were thrown off course by the crisis in the semiconductor industry. How is this even possible? And how can future supplies be guaranteed?
The automotive sector has a long history of having reliable supply chains. Each of the thousands of parts that go into making a car are produced by hundreds of different suppliers around the globe, and every single one of these parts was available on the assembly line when it was required.
But in 2021, these supply chains, which had previously been so solid, started to break. The troublesome parts, notably semiconductors, were precisely those that were anticipated to be crucial to both the inner workings of the cars and the manufacturers’ brand identities. They are still in insufficient supply, which prevents many cars from being constructed on schedule or at all. The German Automotive Industry Association (VDA) estimates that just German automakers will produce about 700,000 fewer vehicles in 2022. That is a drop from the prior year of about 13%. Before the second half of 2023, a considerable improvement in semiconductor supply looks unlikely to occur.
Which automobile types remain untouched by the chip shortage?
- Touchscreen: BMW BMW.
- Car and Driver Marc Urbano.
- Lexus: Super Cruise (Now Resumed)
- Cadillac.
- HD Radio for GMC and Chevrolet.
- Heated seats and steering wheels for Chevrolet/GMC vehicles.
- Satellite navigation: Ford
- Ford
Which vehicles are impacted by the chip shortage?
Those impacted who? Due to a shortage of chips, several automakers, including Stellantis, the Volkswagen Group, the Renault-Nissan-Mitsubishi Alliance, and Jaguar Land Rover, have had supply problems that have caused numerous plants to temporarily shut down.
Why are Porsche vehicles so scarce?
Germany — Due to a shortage of parts, Porsche is now unable to deliver a number of vehicles, including the Panamera and Macan models’ matrix headlights.
Reimold claimed that the production of the Panamera and Macan models in Leipzig, Germany, is hampered by a headlight supply shortage that prevents the completion of several hundred vehicles on the manufacturing floor.
According to Reimold, the supply chain situation is extremely difficult: “Right now it is actually really uncomfortable because we have to be continually watchful,” he added. “When the situation will substantially improve is difficult to predict.”
Production of the Porsche Macan is depicted. The SUV’s deliveries have been hampered by a component scarcity.
Reimold claimed that the same is true for semiconductors, where there is now no hope for improvement, and he emphasized the need for a strategic shift.
The production manager stated, “Looking ahead, we need to standardize more in components to reduce complexity in supply chains.”
The lack of knowledge about the chip supply chain by automakers is being blamed by a number of semiconductor executives. In theory, Reimold continued, the supply chain situation is “extremely tough, but yet workable.”
Despite the best efforts of automakers to conserve energy or obtain it from alternative sources, Reimold added, a Russian gas supply freeze may also have unforeseeable effects on the industry.
He declared, “The weakest link in a chain inevitably breaks.” “Some industries, like glass manufacture, are particularly dependent on gas.”
Due to a lack of components, manufacturers have frequently had to halt production or even shut it down entirely in recent months.
145,860 Porsche automobiles were delivered to consumers in the first half of 2022. Comparing this to the same time last year, there has been a 5% decrease.
Planning issues brought on by the recent COVID-19 lockdowns in China and the effects of the war in Ukraine have made the stressful situation on the semiconductor market much worse.
IHS Markit experts estimate that just German automakers will be able to build 700,000 fewer cars this year than initially anticipated.
Tier 2 and Tier 3 suppliers are experiencing financial strain due to a lack of parts and rising commodity prices, which in certain circumstances forces them to approach their Tier 1 clients to renegotiate pricing or request a cash infusion.