BMW is to close two plants including its Mini facility in Oxford because of a shortage of semiconductors, making it the latest carmaker to be dragged into a crisis that has beset the auto industry for months.
The Oxford factory will halt production from Friday until at least Wednesday, the carmaker told workers on Wednesday, in the latest sign that the crisis facing the sector is deepening.
BMW will suspend production at its Regensburg plant in Germany on Thursday and Friday, the first time that the German carmaker has been hit by a crisis threatening the industry’s post-pandemic recovery.
The UK facility was one of the few global car factories to be running at full production after the pandemic, buoyed by exports to China and demand for the latest electric Mini.
The shortage erupted late last year as a faster than expected recovery in demand for cars strained chipmakers already struggling to meet orders from consumer electronics groups. Severe storms earlier this year in Texas, where some chipmakers are based, and a fire at a Renesas factory in Japan have also hampered supplies.
As the shortages sweep the sector, carmakers are shutting plants with minimal notice because parts from suppliers dry up with little or no warning.
Only 24 hours before BMW made its decision, Mini’s head Bernd Körber told the FT the company has “not been affected so far, but every day we are looking into the situation”.
“It is and will remain for the next several months an issue that we have to look at,” Körber told the FT on Tuesday. “A lot of plants have already been affected for a lot of manufacturers.”
Carmakers from Nissan to Toyota and Ford have closed plants because of the shortages, in a move analysts expect to cost the industry billions this year.
Jaguar Land Rover has closed two of its UK plants — Halewood and Castle Bromwich — for at least a week, while Volkswagen has warned that it expects the second quarter of the year to be worse than the first.
Few manufacturers have yet quantified the cost of shutting operations, though Ford warned in February that stoppages could cost it $2.5bn in lost profits this year.
The US carmaker has shut operations across North America and Europe, including its Dagenham parts plant in the UK.
Source: Economy - ft.com
