Autos

Jaguar Land Rover, Daimler production scaled back due to global chip shortage

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Key Points
  • Jaguar Land Rover announced that it has been forced to stop car production for a "limited period" at its Castle Bromwich and Halewood manufacturing plants in England.
  • Mercedes-maker Daimler is cutting the hours of up to 18,500 workers and pausing production at two plants in Germany.
  • Elsewhere in Europe, French car giant Renault said Thursday that its sales in the most recent quarter had been hit by the semiconductor shortage.

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2020 Land Rover Defender
Source: Land Rover

LONDON – The global chip shortage is continuing to wreak havoc at some of the world's biggest carmakers.

Britain's Jaguar Land Rover announced Thursday that it has been forced to stop car production for a "limited period" at its Castle Bromwich and Halewood manufacturing plants in England as a result of the chip shortage, which has been going on for several months now.

"Like other automotive manufacturers, we are currently experiencing some Covid-19 supply chain disruption, including the global availability of semi-conductors, which is having an impact on our production schedules and our ability to meet global demand for some of our vehicles," a spokesperson told CNBC.

They added: "We are working closely with affected suppliers to resolve the issues and minimize the impact on customer orders wherever possible."

The Coventry-headquartered firm — which produces cars like the popular Range Rover Evoque, the iconic Land Rover Defender, and the Jaguar F-Pace SUV — said production will continue at its Solihull plant near Birmingham while its other factories are out of action.

Jaguar Land Rover's announcement comes just two months after the company announced it was going to cut 2,000 non-factory jobs.

It also comes a day after Mercedes-maker Daimler said it is cutting the hours of up to 18,500 workers and pausing production at two plants in Germany. Daimler said the pause will commence on Friday and last for at least a week.

"Currently, there is a worldwide supply shortage of certain semiconductor components," a spokesperson reportedly told Reuters. "We continue to play things by ear."

"The situation is volatile, so it is not possible to make a forecast about the impact," they added.

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How the global computer chip shortage happened

Elsewhere in Europe, French car giant Renault said Thursday that its sales in the most recent quarter had been hit by the semiconductor shortage.

In a bid to mitigate the impact, the company has pledged to focus on its most profitable models and increase prices.

Meanwhile, Sweden's Volvo said Thursday that it anticipates more risk from the "unstable" chip supply chain. The automotive firm has already been forced to halt truck production and idle plants.

"The global supply chain for semiconductors as well as for other components remains very unstable and the uncertainty about the development is high," Chief Executive Officer Martin Lundstedt said in Volvo's first-quarter report. "We maintain our readiness to increase production when possible."

Shares of Renault were down almost 2% during Thursday afternoon trading in Paris, while Daimler was down around 1% on Frankfurt's main market. Volvo was up around 2%.