Renault sees production risk of 100,000 units from chip shortage

PARIS — Renault hopes to limit production losses from the semiconductor shortage to 100,000 units or less, CEO Luca de Meo said, but he added that the situation remained fluid on almost a daily basis.

The shortage of the chips, which are essential for running many systems on modern vehicles, has thrown global automotive production into uncertainty. Almost every automakers has had to suspend production at one point in the past three months.

Analysts say the global production shortfall in the first half could reach 1 million units or more, but expect that chip supplies should be restored in the second half and most lost production will be recovered. The shortage has been linked to increased demand for consumer electronics, especially because of coronavirus lockdowns.

“Our visibility on chip supply is pretty limited,” de Meo said Friday on Renault’s earnings call. “We’re getting as much information as possible on a daily basis. but at this stage we’re not able to make any solid assumptions month by month.” 

He said he expected the peak of the shortage to be in the second quarter, with a recovery in the third.

“For the full year our best guess is that we have to work on an envelope of risk of 100,000 vehicles, which we are trying to reduce to the minimum,” he said. The group has already temporarily halted production in factories in Morocco, Romania and France.

Automakers including Daimler and Toyota also expect production to catch up in the second half.

De Meo said Renault managers were working with suppliers to move parts to where they were most needed. “It’s a continuous battle, probably until the end of the year, although we believe the supply shortage will ease in the second half,” he said.

Renault CFO Clotilde Delbos said Renault had flexible contracts with employees that would allow it to potentially use the August break as a time to make up any lost production. “It’s very important that we can use that capacity to recoup what we have lost in a few…

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