Jaguar Land Rover Moves To End Chip Shortage

Luxury car manufacturer Jaguar Land Rover (JLR) has experienced huge disruptions to production due to a global shortage of microchips. However, the firm claims that a resolution may be close.

The company recently reported a decline in quarterly sales and a £302 million pre-tax loss and has cited the chip shortage as one of the causes. Global demand for its proud its remains strong, the firm said, but the chip shortage meant that it has not been able to ship enough cars out to meet consumer demand.

In the summer it was reported the waiting list for company cars could be up to a year long.

The chips are responsible for vehicles’ digital systems, controlling engine management, driver aids such as satnavs, onboard cameras, radio, and communication devices. But dependence on this tech has created a crisis for the automotive sector, which is still trying to recover from the pandemic.

Lockdown measures in the Far East at the beginning of 2020 caused chip factories to shut down production, which initially was not as much of an issue, as shutdowns at other facilities meant there was less of a demand for chips.

However, the global transition for working remotely during the pandemic caused a rush on laptop computers and other tech, creating a surge in demand for semiconductor chips, which the industry was unable to meet.

A fire at a Japanese factory making semiconductors for the car industry has worsened the shortage.

JLR says the semiconductor shortage remains ‘dynamic’ and difficult to forecast. However, it says it expects to see a gradual recovery starting in the second half of its fiscal year in 2022, and is now closely working with chip suppliers to address the shortage.

Thierry Bollore, JLR’s chief executive, said: “The global semi-conductor shortage remains challenging but I’m pleased to see the actions we have been implementing reduce the impact. With strong customer demand with a record order book, we are well placed to return to strong financial performance as semiconductor supply begins to improve.”

 

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