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Discussion Starter · #1 ·
I placed an order for my a mk8 GTE as my next company car back in March, and whilst it was due to be delivered next week, I am told by one person in the leasing company that the car has a factory number but no confirmed build date.
The account manager for the lease company is saying that VW are building cars and stock piling them waiting for delivery of semiconductors to be fitted postproduction.

I am not sure which person to believe and appreciate that this is a worldwide issue that is affecting many different industries and products. Nevertheless, the whole situation is becoming frustrating.

Is anyone else in the same position?

Is it possible to build cars and fit the semiconductors needed for the electrics once the car is built?

If anyone has been waiting for a new car to be built, what was the lead time you had to wait?
 

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Is it possible to build cars and fit the semiconductors needed for the electrics once the car is built?
Yes, I’d have thought so. Most of the chips will be in control units that can be removed/installed via a workshop procedure.
 

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They probably need to have all the chips installed and working (in control units) or the car lights up like a Christmas tree and then you can't do testing.

(Assuming VW still do testing?) :p
 

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It is a global issue, not just cars / semiconductors. Basic parts like connectors and cable assemblies that we would normally get ex stock are coming up with 3 month lead times, and prices of copper etc are shooting up.
 

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Ordered an ehybrid Arteon in March. Expected a June delivery, but was delayed to September. In August they close the factories until 27 August. New Jags and Mercedes have an 1 year waiting period. This is getting worse day by day...
 

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I read elsewhere that VW have temporarily closed the order books for the ID.3 "Pure" spec, so they can use what chips they have on more profitable models.
 

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I work in the electronics industry. Some parts are on 24 month lead times. There is absolutely nothing that can be done about this, not by VW and not by any other automaker. From our end of the industry, it is very unlikely that there will be any resolution to this until perhaps later in 2022, possibly not until 2023. You just have to join the queue and wait.

There is a good reason the price of used GTEs (and other cars) has shot up. For instance, I paid £15,900 for my 3 year old Golf GTE. It is now approaching its 6th birthday (will be in September) and on Autotrader, it looks like it still commands £14,000. Perhaps an option for you would be to buy a year-old Mk7.5 but be prepared to pay nearly as much as a Mk8 retails for. Some Tesla Model 3's were selling for more as used cars than new ones due to the shortage.
 

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I work in the electronics industry. Some parts are on 24 month lead times. There is absolutely nothing that can be done about this, not by VW and not by any other automaker. From our end of the industry, it is very unlikely that there will be any resolution to this until perhaps later in 2022, possibly not until 2023. You just have to join the queue and wait.

There is a good reason the price of used GTEs (and other cars) has shot up. For instance, I paid £15,900 for my 3 year old Golf GTE. It is now approaching its 6th birthday (will be in September) and on Autotrader, it looks like it still commands £14,000. Perhaps an option for you would be to buy a year-old Mk7.5 but be prepared to pay nearly as much as a Mk8 retails for. Some Tesla Model 3's were selling for more as used cars than new ones due to the shortage.
Chatting to our cable manufacturers they reckon from when full production resumes (ie impact of Covid has stopped) it will be a further 12 - 18 months beyond that before the supply chain is back to normal. It goes all the way back to the copper mining and manufacture of the PUR.
 

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The chairman of corporate council at Skoda has said that they currently focus on more profitable models. Admittedly, VW does the same.

Now your car is only collecting bird poop. Hopefully you'll get your car this year.
 

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Discussion Starter · #11 ·
So from what I am reading I will very lucky if I get my car before the end of the year. It would be great if could if I could take a cash option so that I could go out and buy my own car however, that is not an option.

If Skoda can store 50k cars waiting for parts, I wonder how many cars VW can store, because this could dictate whether my car has already been built or will be built soon
 

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I work in the electronics industry. Some parts are on 24 month lead times. There is absolutely nothing that can be done about this, not by VW and not by any other automaker. From our end of the industry, it is very unlikely that there will be any resolution to this until perhaps later in 2022, possibly not until 2023. You just have to join the queue and wait.
I'm also in the semiconductor industry and things are crazy right now. Allocation and spot buying is the thing right now. Suppliers are allocating stock to key customers and spot buying their own products, often at inflated prices to fulfill key customers needs where they can.

Semiconductors are used everywhere in a car, voltage regulators, crystals for clock speeds, processors, RAM, flash and even discrete components such as capacitors are in short supply.

So anything in a car from the infotainment system, the multiple ECUs, power control modules, CAN bus drivers, LCD screens, ABS systems, Bluetooth and WiFi, right down to components used in an electric window modules and HVAC could be impacted. it just needs one supply issue in any one of thousands of parts to bring production lines to a standstill.

Its also not just cars impacted either. medical, devicies, consumer devices, industrial devices are all impacted to one degree or another.

Some more agile manufacturers and industries may be able to design in alternative parts at short notice, such as a different variant of a microcontroller. But if you have a large complex product with lots of regulatory involvement then that might not be so easy.

Automotive may be impacted more than others due to very low stock holding at the time the issue started, which caught them off guard. Automotive is very highly regulated as well, a redesign of a system may require recertification and that is hugely time consuming and expensive and is unlikley to happen. Automotive grade electronics are a step above regular consumer grade components as well adding to the limited supply.

to quote a colleague of mine when asked when things will improve he simply replied "we havent seen the bottom of this yet and we will only know we have reached the bottom when we stop getting ever more bad news."

In our part of the industry we are recommending customers to place orders for requirements for fulfillment in the second half of 2022 or perhaps even further out than that.
 

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Automotive may be impacted more than others due to very low stock holding at the time the issue started, which caught them off guard.
If they knew they will build X number cars next quarter, why not hold stock for that? As mentioned, it's not like the design will change due to large amount of recertification.
If there was an over supply, electronics doesn't take significant warehouse space compared to other car parts.

I think this is a case of automotive industry being set in their old ways, doing just-in-time supply chain management without understanding the semiconductor industry limitations.
I think although supply was an issue, the tidal wave level demand shifts from one extreme to the other by automotive industry have compounded the issue greatly. They shouldn't have reduced orders when Covid started, and now they increase their order while other industry are suffering at the same time. They've even asked President of US to resolve this...... Tough, join the queue mate.
 

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If they knew they will build X number cars next quarter, why not hold stock for that? As mentioned, it's not like the design will change due to large amount of recertification.
If there was an over supply, electronics doesn't take significant warehouse space compared to other car parts.

I think this is a case of automotive industry being set in their old ways, doing just-in-time supply chain management without understanding the semiconductor industry limitations.
I think although supply was an issue, the tidal wave level demand shifts from one extreme to the other by automotive industry have compounded the issue greatly. They shouldn't have reduced orders when Covid started, and now they increase their order while other industry are suffering at the same time. They've even asked President of US to resolve this...... Tough, join the queue mate.
JIT is relatively new, not stuck in their old ways. Thing is, it has to be done right. Toyota for instance do it right. Others... it's harder to say they do.

Warehousing components is not free. For instance Digi-Key sells components but the markup is between 30-40% of the direct negotiated price once you are at those kinds of volumes.

Do you want to pay that much more for components? Probably not, but that's the end result of warehousing.

The response to Covid is their fault, but JIT itself is not a bad idea, when done right. Toyota hasn't seen anywhere near the same issue because they didn't cancel orders when the pandemic hit. They rightfully decided to ride the wave out and see where demand headed. Most car manufacturers thought demand would drop but as people were getting furlough pay, mortgage holidays and many jobs were able to transition to remote working, and people were avoiding public transport, demand for cars shot up rather than fell.

Too many actors in the market panic when a change hits and it causes ripples through the industry.
 

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Discussion Starter · #15 ·
I work in the supply chain industry and so I am seeing first hand shortages with certain items. However, because I work mainly with food manufacturers or manufacturers of paper products, I am aware of certain things being in short supply and lead times being extended, I was just not aware of just how badly hit other industries have been.

For my own business - renting wooden pallets, we have seen the cost of raw materials - wood, steel for nails etc. increase by70+% since the start of the year and it shows no sign of levelling off. I won't even talk about Brexit and the impact that has - is having on costs
 

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I work in the supply chain industry and so I am seeing first hand shortages with certain items. However, because I work mainly with food manufacturers or manufacturers of paper products, I am aware of certain things being in short supply and lead times being extended, I was just not aware of just how badly hit other industries have been.

For my own business - renting wooden pallets, we have seen the cost of raw materials - wood, steel for nails etc. increase by70+% since the start of the year and it shows no sign of levelling off. I won't even talk about Brexit and the impact that has - is having on costs
A bit offtopic: iron and copper prices also raising AF.

Now, ontopic: I'm observing a quite notable increase of prices in the used cars market, since there aren't enough new cars. Demand is still there, while supply is severely restricted due to the aforementioned shortages. Just my two cents.
 
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