FIEV Press Release on the shortage of electronic components

The Fiev partner of the TAA issued a press release concerning the shortage of electronic components which is closely affecting the automotive industry. It should be remembered that the Fiev is the Federation of Vehicle Equipment Industries, and wants to be the spokesperson for automotive equipment manufacturers in France.

Shortage of electronic components

  Based on the results of a survey conducted among its members, the FIEV is alarmed by the consequences of the shortage of semiconductors, which, combined with other pressures on the prices of certain components and raw materials, weaken the entire productive apparatus. Faced with this situation, which is getting worse and should be set to last, the FIEV calls for a concerted response from the entire automotive industry.

1 million vehicles not produced in the first quarter of 2021

The automotive industry is facing an unprecedented shortage of electronic components, and in particular semiconductors. Vehicle production is directly impacted, worldwide. As a direct consequence of this shortage, 1 million vehicles will not be produced in the first quarter of 2021.

 While the semiconductor shortage alone is disrupting the entire automotive value chain, other equally essential components are at stake. currently more and more complicated to obtain on markets disrupted by the consequences of the pandemic: new tensions are indeed observed on steel and plastic materials.

Shortages that are worsening and expected to persist

These various shortages threaten to paralyze automotive production and weigh directly on equipment manufacturers. The FIEV is thus concerned about this destabilization of activity which could slow down the recovery, and therefore threaten jobs on French sites. For observers, the situation, certainly evolving according to markets and activities, but which is currently getting worse, should continue until 2022 in the best of scenarios. IHS Markit thus forecasts a peak in the second quarter of 2021. To assess the consequences of this situation more precisely, the FIEV questioned all of its members. The observation is clear, the vast majority are impacted by these shortages. 84% of respondents say they are impacted by problems with the supply of components or alloys: 43% are directly impacted, 41% are indirectly impacted (following production stoppages at their manufacturer customers or disruptions in supplier deliveries ). 92% of them report late deliveries, between one and six months for 50% of them. Tensions in terms of supply, transport and logistics lead to an increase in purchase prices (declared by more than half of the respondents: between 10% and 25% increase for 37% of them, and between 25% and 50% increase for 16% of them.) These shortages have different consequences on the activity of equipment manufacturers, depending on their activity or their position on the supply chain, but overall, they destabilize the whole of the industrial apparatus to the point of bringing about the stoppage of certain production lines.

Solutions to be identified: the need for peaceful consultation within the sector

By publishing the results of this survey conducted among its members, the FIEV wishes to warn of the worsening of shortages and their impact on the entire automotive sector, in particular on the activity of equipment manufacturers. If the FIEV understands that this situation can strain customer-supplier relations within the sector, it wishes to recall that all the players have recently renewed their commitment, by signing the Charter of commitment on relations between customers and suppliers. and the Code of Performance and Best Practices, to a constructive and objective dialogue as a principle of cooperation and management of problems. This is why the FIEV would like the management of the various shortages to be based on the joint search, between the manufacturers and the equipment manufacturers, for balanced solutions. “These various shortages, the causes of which are directly linked to the pandemic, are destabilizing the entire automotive sector and weakening the resumption of activity. They reveal our technological dependence, and underline the urgency to act to regain our industrial and economic sovereignty. These new difficulties reinforce the relevance of the Charter of commitment on relations between customers and suppliers within the automotive sector signed in May 2020 and of the Code of Performance and Best Practices also updated and signed by all stakeholders in the sector in November 2020 during of the last Strategic Committee for the Automotive Sector, in the presence of Bruno Le Maire, Minister for the Economy, Finance and Recovery, Barbara Pompili, Minister for Ecological Transition, Jean-Baptiste Djebbari, Minister Delegate for Transport and Agnès Pannier-Runacher, Minister Delegate in charge of Industry. These agreements provide for strengthening relations within the sector through constructive dialogue and tools adapted to the service of the sustainability and competitiveness of the French automotive sector. It is precisely thanks to this concerted approach that we will collectively identify the best solutions to deal with these shortages and activate all the levers for a recovery. The success of a sector essential to our economy and the preservation of jobs in our territories depend on it. » declares Claude Cham, president of the FIEV. Source: FIEV, Press Release – March 18, 2021

Download the FIEV Press Release here

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