Volkswagen Group’s Spanish subsidiary Seat is dealing with manufacturing shortfalls from a number of sources, first from the semiconductor scarcity and now from the impression of the battle in Ukraine, CEO Wayne Griffiths stated.
Seat had an working lack of 371 million euros ($407 million) in 2021, when manufacturing was 25 % lower than deliberate due to a scarcity of chips, Griffiths stated.
He stated the scarcity had a detrimental impression of 600 million euros general on the steadiness sheet of the unit, which incorporates Seat and the Cupra efficiency model.
The subsidiary recorded a internet lack of 256.3 million euros in 2021.
Manufacturing at Seat’s essential plant in Martorell, close to Barcelona, and at two VW vegetation that construct Seat autos is presently disrupted due to the persevering with chip scarcity in addition to provide points linked to the battle, Griffiths stated Wednesday at Seat’s annual information convention.
The continued disaster in Ukraine has prompted disruptions at some auto meeting vegetation and prompted corporations to droop shipments to Russia, affecting just about all automakers throughout Europe.
VW Group, up to now, has bounced again rapidly from components shortages brought on by the battle. It restarted manufacturing sooner than deliberate at its Wolfsburg plant.
Martorell, which builds the Seat Ibiza small hatchback, Seat/Cupra Leon compact hatchback and the Cupra Formentor compact crossover, is working at a decrease degree due to a scarcity of chips, “and will probably be additional impacted by a scarcity of important components from Ukraine,” he stated.
Griffiths stated the slowdown primarily impacts the Leon and Formentor meeting line, notably for plug-in hybrid variations; the road is presently engaged on two day by day shifts as an alternative of three.
Griffiths added that manufacturing of the full-electric Cupra Born in Zwickau, Germany, has been briefly interrupted and that manufacturing of the Seat Tarraco midsize SUV in Wolfsburg, Germany, has been placed on maintain attributable to a scarcity of components coming from Ukraine.
The impression of the battle in Ukraine is prone to overshadow the semiconductor scarcity difficulty this yr, Griffiths stated. Seat just isn’t solely involved a few lack of components from Ukraine, he stated, but additionally concerning the provide and value of power, and the consequences on inflation and macroeconomic points. He cited secondary results corresponding to a truck drivers’ strike in Spain to protest rising gasoline costs.
Griffiths stated {that a} fast answer to the Ukraine disaster doesn’t look possible in the mean time, and that “the longer it goes on, the more severe the collateral impression will probably be.”
Given the uncertainty, he stated, it’s not doable to forecast the extent of the impression on Seat operations this yr.
Seat was unable to provide roughly 115,000 models out of a forecast 500,000 at Martorell, the determine consists of manufacturing for Audi model. The shortfall primarily affected “high-margin fashions,” Seat finance chief David Powels stated Wednesday.
Powels stated the shortfall prevented Seat from bettering on 2020’s outcomes, when it posted a internet lack of 194.2 million euros. He stated the losses made in 2020 and 2021 on volumes that had been considerably decrease than earlier than the COVID-19 pandemic “present Seat’s break-even level remains to be too excessive.” Seat’s gross sales hit a document in 2019 at 574,100.