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Volkswagen warns of worsening output hit from chip shortage -FT

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Volkswagen AG has warned managers to organize for a much bigger production hit within the second quarter than the primary thanks to a worldwide chip shortage, the Financial Times reported on Saturday.

“We are being told from the suppliers and within the Volkswagen Group that we’d like to face considerable challenges within the second quarter, probably tougher than the primary quarter,” Wayne Griffiths, president of Volkswagen’s Spanish brand Seat, told the FT.

Griffiths called the shortage the “biggest challenge” the corporate faces at the instant .

He said production at Seat’s Martorell plant outside Barcelona was currently “hand to mouth”, with the brand deciding what cars to create only after it receives chips from suppliers, the report said.

Volkswagen has said it expects chip supply to stay tight within the coming months, adding it couldn’t provide visibility for the complete year.

The company has been unable to create 100,000 cars thanks to the shortage, CEO Herbert Diess said last month, adding the group wouldn’t be ready to structure for the shortfall in 2021.

“The situation has been exacerbated i.e. by the blizzards that have occurred in Texas, because the large chip manufacturers based there had to prevent or reduce their production. For that reason further adjustments to production can’t be ruled out”, Volkswagen said in an emailed statement on Saturday