Volkswagen Group has warned managers to organize for a much bigger manufacturing hit within the second quarter than the primary as a result of a worldwide chip scarcity, the Monetary Instances reported.

“We’re being informed from the suppliers and throughout the Volkswagen Group that we have to face appreciable challenges within the second quarter, most likely more difficult than the primary quarter,” Wayne Griffiths, head of VW’s Spanish model Seat, informed the paper.

Griffiths referred to as the scarcity the “greatest problem” the corporate faces in the mean time.

Manufacturing at Seat’s Martorell plant outdoors Barcelona was at the moment “hand to mouth,” Griffiths informed the paper, with the model deciding what vehicles to construct solely after it receives chips from suppliers.

VW has stated it expects chip provide to stay tight within the coming months, including it couldn’t present visibility for the total yr.

The corporate has been unable to construct 100,000 vehicles as a result of scarcity, CEO Herbert Diess stated final month, including the group wouldn’t be capable of make up for the shortfall in 2021.

“The scenario has been exacerbated i.e. by the blizzards which have occurred in Texas, as the massive chip producers primarily based there needed to cease or scale back their manufacturing. For that cause additional changes to manufacturing can’t be dominated out,” VW stated in an emailed assertion on Saturday.