CHIP SHORTAGE LIKELY TO PERSIST

But luxury carmakers say not expecting major impact in near term

LUXURY carmakers will need to resolve supply chain issues, most notably the shortage of automotive chips, to take advantage of government incentives, including the sales tax exemption that ends year end.

The automotive chip shortage, which began late last year amid the surge in demand for personal devices, may continue into next year.

However, some market observers said they believed Malaysia was unlikely to see a major disruption to the supply of luxury vehicles.

Sime Darby Motors Sdn Bhd (Sime Motors), the importer and distributor of Jaguar Land Rover (JLR) vehicles in Malaysia, said it was not expecting any major supply disruptions in the immediate term as a result of the chip shortage.

“This is based on our present inventory level and confirmed shipments of new stock,” a company spokesman told the New

Straits Times.

Sime Motors has 27 branches retailing BMW, MINI, Motorrad, Volvo, Porsche, Ford and Hyundai vehicles while Sime Darby Auto Selection retails quality pre-owned cars.

BMW Group Malaysia head of corporate communications Sashi Ambi confirmed that the chip shortage would not affect the company as much as the other carmakers.

Daimler AG, the parent company of Mercedes-Benz, recently reported that deliveries during the second quarter were “significantly” curtailed by a lack of chips, capping its global sales increase at 27 per cent.

But Daimler, Volkswagen AG and Jeep maker Stellantis NV said they were coping well with the scarcity of chips that has constrained production since late last year.

In the meantime, the carmakers were prioritising their biggest moneymakers, Bloomberg recently reported.

Mercedes-Benz Malaysia Sdn Bhd (MBM) said it was unable to comment on the chip shortage issue.

“Dr Claus Weidner’s tenure as president and chief executive officer in Malaysia has ended. There will be new management updates soon,” said a MBM spokesman.

JLR said the chip shortage issue would likely continue till year end and maybe beyond.

In another report, Taiwan

Semiconductor Manufacturing Co Ltd (TSMC), a global supplier of chips, said it expected sales to rise more than 20 per cent this year, affirming its crucial role in helping alleviate a global chip shortage that had impacted major industries.

TSMC, a key partner to many of the world’s biggest carmakers, expects semiconductor supply to remain tight next year as well.

The company has ramped up production of microcontrollers by close to 60 per cent so far this year, which it hopes will greatly boost supplies starting in the current quarter.

In the United States, production of motor vehicles slumped 6.6 per cent last month after a 7.3 per cent increase in May.