http://www.thetruthaboutcars.com/2011/01/volkswagen-shuts-down-wolfsburg/

So VW is shutting the whole Wolfsburg plant for a day... not because there is no demand but because they are running out of parts and engines. Hmmm. Wonder when Å koda will follow suit?

We don't have that problem... :no:

I deal with a company who is very involved supplying Nissan. The manager explained to me a while ago about the knock on problems that occurred within the industry when car mfrs scaled down production and some, Nissan and Honda stand out here, actually closed for a period. Most car mfrs will have suppliers on their doorstep who solely sell to that plant. When the mfrs stopped production for 3-4 months a number of those firms went bust, scaled down, lost skilled staff as they simply had no money coming in during this period. When the car firms started up again they just assumed that their suppliers would jump to it again and carry on as normal, not appreciating the difficulties that they had faced. I think these problems of supply which are happening to a number of car mfrs is a consequence of this. The car firms are hugely arrogant and aggressive towards their suppliers, I know in Nissan's case you are treated as the enemy not in terms of a partnership which is how the better firms work. The suppliers that existed 3 years ago are not there now in the same numbers and this is the penalty.

I appreciate this bit of logic is not a full explanation but I am sure it is part of the problem that the car companies are facing and on the whole it is of their own making.

I heard that Audi get priority on the parts hence why there is over 7months waiting list for some Skoda models

I appreciate this bit of logic is not a full explanation but I am sure it is part of the problem that the car companies are facing and on the whole it is of their own making.

But a darn good explanation it is anyway.

Here is another article stating Porsche and Mercedes are in the same boat:

https://home.autonews.com/clickshare/readLink.do?CSAuthKey=jIJvrNnjR7Y-tHHw4Nl4lRQ-0

VW, Mercedes, Porsche battle against parts shortages as German auto boom overheats

High demand in China and the U.S leads to supplier squeeze

VW hopes to stabilize parts supplies with a three-shift shutdown at its factory in Wolfsburg.

BERLIN (Bloomberg) – Volkswagen AG will halt production at its main factory in Wolfsburg, Germany, on Monday, because of a shortage of engines and other parts.

BMW AG, Porsche SE and Mercedes-Benz also said supply constraints leave them with little room to move.

Carmakers are feeling the pinch of tight component supplies as parts makers struggle to keep pace with resurgent vehicle demand.

“The problem we have is that other businesses we're dependent on closed capacity†during the recession, Lars Holmqvist, CEO of European auto suppliers association Clepa, said in a telephone interview from Brussels. “Electronics are particularly tight. It's a real problem and it's growing.â€

Booming demand for German cars in China and the U.S., the world's two biggest auto markets, shows no signs of abating.

VW aims to increase deliveries this year 5 percent after record sales of 7.14 million vehicles in 2010. BMW and Daimler are boosting 2011 capacity to keep up with demand, which in turn puts pressure on suppliers to invest scarce capital.

“Suppliers are under a lot of strain†because of the upfront financing required to increase production, said Christoph Stuermer, a Frankfurt-based analyst at IHS Automotive. “Some suppliers are getting to the point that they just can't produce parts†without help from carmakers.

Shift to batteries

The relationship between suppliers such as Robert Bosch GmbH, Valeo SA and Pirelli & C SpA and the automakers has tightened as development times shorten and car companies insist components be delivered shortly before assembly to reduce inventory costs. At the same time, the gradual shift to battery-powered vehicles offers little incentive to invest in aging technologies.

“We have started the decline of the combustion engine and that will kill companies,†Holmqvist said. “The banks are still very cold†because of lingering impacts of the recession, concerns about the sustainability of the recovery and the advent of electric cars.

Component manufacturers are critical to the automotive industry, accounting for about 75 percent of the value of an average car, up from 65 percent 10 to 15 years ago, said Stefan Bratzel, director of the Center of Automotive Management at the University of Applied Sciences in Bergisch-Gladbach, Germany.

Porsche production

Porsche is considering shifting some production of its Cayman and Boxster models to a VW plant in Osnabrueck, Germany, David McAllister, Lower Saxony Prime Minister and a VW supervisory board member, said Wednesday in Qatar. Porsche is grappling with record orders and weighing the addition of a compact SUV vehicle to its lineup.

“The supply situation is no doubt extremely strained at the moment,†Porsche spokesman Dirk Erat said by phone. “It's very important that nothing goes wrong; the chain of logistics must be kept running.â€

The three-shift shutdown at Volkswagen's biggest factory, which followed a canceled shift on Jan. 22, is designed to help stabilize parts supplies after a shortened break over the Christmas holidays, VW spokesman Christoph Adomat said. The one-day closure affects the production of about 3,000 Golf hatchback, Tiguan SUV and Touran minivan models, he said.

The three-day weekend will be used to install equipment for the planned expansion of the body shop for the Tiguan, Adomat said, adding that lost production can be made up and won't lengthen delivery times. VW aims to increase production of the Tiguan to 1,000 a day from 700.

Record sales

BMW, which is forecasting record sales of more than 1.5 million BMW, Mini and Rolls-Royce models this year, completed an expansion of its U.S. factory late last year and will spend 400 million euros at a plant in Leipzig, Germany, to prepare for the production of an electric city car by 2013.

“Parts have been tight for us but we've found ways to keep the assembly lines rolling,†said Frank Wienstroth, a spokesman for BMW in Munich.

The same goes for Mercedes, which projects record sales as it rolls out new versions of the CLS luxury coupe and SLK hard- top roadster.

“Capacity is tight in the industry,†said Markus Mainka, a spokesman for Mercedes in Stuttgart. “Due to our flexibility and close dialogue with suppliers, we see no issues with our production.â€

The demand, while putting a strain on factories, is also a boon to suppliers after the financial crisis forced them to rein in production.

Bosch boom

Robert Bosch, the world's biggest component maker, said yesterday sales rose 24 percent to 47.3 billion euros ($64.5 billion), the highest in the company's 125-year history. It made a pretax profit of 7 percent to 8 percent of sales after a loss of 1.2 billion euros in 2009. Closely held Bosch is targeting sales of more than 50 billion euros this year, driven by growth in Asia and Latin America.

“The supply situation is strained overall because we weren't expecting demand to be this strong,†said Thomas Knoll, a spokesman for Stuttgart, Germany-based Bosch. “Since we kept the core of our production team together during the crisis, we're managing to fulfill all requests.â€

Pirelli, Europe's third-largest tiremaker, plans to increase capacity to keep up with demand that has surpassed its pre-crisis levels, Chairman Marco Tronchetti Provera told reporters yesterday in Milan.

“We are stretched with orders,†said Tronchetti Provera. “All our plants are working at full speed.â€

Edited 28 January, 201115 yr by 900000