Supply chain problems slow Porsche production

PREMIUM German car-maker Porsche is suffering a “perfect storm” of production problems slowing their assembly lines and delaying delivery times, the latest being a shortage of headlights.

The company is currently unable to deliver certain models due to various component supply issues including the matrix headlights found on the Macan and Panamera.

Porsche has resorted to building these vehicles without the affected components and then retrofitting them when the components become available…. after the car has rolled off the assembly line.

“Currently we have retrofit vehicles again,” said Porsche production and logistics manager Albrecht Reimold.

“At the moment it is really very tense because we have to be constantly vigilant. It is difficult to forecast when the situation will fundamentally improve.”

According to Automotive News Europe (ANE) Mr Reimold said that when the Panamera and Macan models are produced, several hundred vehicles on the factory floor cannot be completed because of the supply bottleneck with the headlights.

Rubbing salt into the wound, Porsche’s headlight supply problem also applies to semiconductors (computer chips), where there is currently no relief in sight, prompting Mr Reimold to recommend strategic change.

Echoing similar statements from other European car-makers, Mr Reimold said: “Thinking ahead, we need to standardise more in components to reduce complexity in supply chains”.

More semiconductor manufacturing plants are under development in Europe (and the US) but won’t come on stream for a couple of years and then, most of their production will be needed in areas apart from automotive.

Taiwan is the major source of computer chips globally and has struggled to maintain production and supply.

Meanwhile, many semiconductor executives are pointing the finger at automakers’ lack of understanding of how the chip supply chain works. In principle, the supply chain situation is “very challenging, but still manageable,” Mr Reimold added.

“But that’s not all because there’s a Russian gas supply freeze in force that could also affect the industry in unpredictable ways, despite the best efforts of automakers to save energy or obtain it from other sources,” he added.

“The chain always breaks at the weakest link. Some areas are particularly dependent on gas, such as glass production.”

Complete production shutdowns have become commonplace in Europe over recent months due to a shortage of components. In the first half of the 2022, Porsche delivered 145,860 vehicles to customers which is a drop of five per cent compared to the same period last year.

The fraught situation on the semiconductor market is compounded by planning problems due to China’s COVID-19 lockdowns and the Russia’s invasion of the Ukraine.

German data service providers have floated the possibility that German automakers alone will be able to produce 700,000 fewer cars this year than originally planned.

Coupled with parts shortages, higher commodity prices are also putting a financial squeeze on lower-level suppliers who are, in turn going to their tier one customers to request higher prices for their products or alternatively, ask for a cash injection to stay afloat.

This is all to say nothing of other issues facing car-makers such as ongoing transport difficulties (sea and air), softening consumer demand, inflationary pressures including higher interest rates and intense competition.