Munich The ongoing shortage of microchips has hit the car and truck manufacturer Daimler hard. The Mercedes manufacturer was only able to deliver 435,000 cars from the brand with the star and from Smart between July and September due to a lack of components. This corresponds to a decrease of 30.5 percent compared to the previous year, which was burdened with corona.
The drop in sales was even more severe in relation to the third quarter of 2019, i.e. before the pandemic. At that time, Mercedes sold 590,000 cars, 155,000 units more than currently. In September in particular, Daimler felt the global shortage of semiconductors, the company announced. The Stuttgart-based company is also feeling the crisis more and more in the truck business. Many semi-trailers currently have to be produced in stockpiles.
Improvement is not in sight. “The delivery situation for semiconductors remains volatile and is likely to have an impact on production and sales in the coming quarters as well,” said Daimler. Ferdinand Dudenhöffer sees the bad Mercedes sales as a harbinger of further shock news in the German auto industry. “The next three months will be really tough,” states the head of the Center Automotive Research (CAR).
The reason: According to Dudenhöffer, the vehicle stocks at the dealerships have meanwhile been “swept empty”. Since the chip bottleneck will last at least six to nine months, negative financial effects are inevitable. “The results for all car manufacturers and suppliers will now go down sharply,” predicts the CAR expert.
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Corporations such as Volkswagen or Daimler had already calculated a lower margin in the second half of the year in their outlook for the year as a whole. For some suppliers in particular, some profit warnings could still be imminent in the coming weeks. At the end of September, Hella had already lowered its sales and earnings expectations significantly.
More significant burden than assumed
Overall, the shortage of chips is likely to burden the global vehicle industry to a far greater extent and significantly longer than previously assumed. This year alone, the industry is likely to miss out on sales of 210 billion dollars, the consultants at Alix Partner recently calculated. In May they had assumed that the burden was about half as high.
In Europe in particular, the conveyor belts in many factories have come to a standstill for weeks or even months due to the lack of chips. The Stellantis subsidiary Opel will even completely close its plant in Eisenach, Thuringia, by the end of the year. Meanwhile, the truck manufacturer MAN is currently throttling production in Munich, Nuremberg and Salzgitter. Across the industry, tens of thousands of employees at domestic car manufacturers and suppliers have to put on short-time work again and again.
Amazingly, however, some corporations manage to generate substantial profits despite the harsh environment. For example, BMW recently increased its forecast and is now forecasting an operating return on sales of up to 10.5 percent for 2021. Positive price effects for new and used vehicles would “overcompensate” for the negative sales effects, explained BMW.
It looks similar with arch-rival Mercedes-Benz. Despite the currently miserable sales figures, the Swabians continue to promise their shareholders double-digit returns on sales. This is made possible by the fact that the group is increasingly focusing on class rather than quantity and clearly prioritizing chip allocation.
High-margin models are primarily produced
All available electrical components are primarily directed into the production of high-margin models such as the S-Class or massive SUVs such as GLE and GLS. The production of products with rather low profit margins such as A-Class or B-Class, on the other hand, is being throttled and in some cases stopped entirely. The result: Mercedes delivers proportionally more models with high profit margins.
Three examples of this: Although the deliveries of the brand with the star stagnated after nine months at the level of 2020, when many car dealerships had to be closed for weeks due to the corona, sales of the posh sub-brand Maybach shot up by almost 42 percent.
The Swabians have already sold more than 10,800 vehicles in the finest and most expensive Mercedes category. After three quarters, Daimler has sold almost as many Maybach bodies as in the whole of 2019. The situation at AMG is similar. Despite the crisis, the Mercedes tuning subsidiary sold 116,400 vehicles from January to the end of September. AMG will therefore only have to deliver 16,000 units in the coming weeks to exceed its own sales record of two years ago.
The sales figures for the G-Class SUV are also at an absolutely top level. Mercedes has already handed over almost 32,000 units of the 2.5-tonne colossus to customers this year. That is roughly as much as after twelve months in 2019 and an increase of around 30 percent in relation to the same period of the previous year.
Maybach, AMG and G-Class are driving up Daimler’s profits, but the impact on the rest of the portfolio is becoming more and more violent. The minus in deliveries has recently widened from month to month. And not just at Mercedes, but across the industry. As the Kraftfahrt-Bundesamt (KBA) recently announced, only 197,000 cars were sold in Germany in September. This corresponds to a decrease of almost 26 percent compared to the previous year.
Production and exports plummet
Production in the German automobile plants even plummeted by 44 percent. According to the German Association of the Automotive Industry, exports fell to a similar extent.
Industry insider Dudenhöffer attributes the misery to a “failure of the buyer”. “The purchasing departments at the car companies are too busy with price gimmicks and far too little with safeguarding strategically important supply chains,” criticized the CAR director.
How bad the situation can be can be seen once again at Daimler. The group now even had to admit that it could only deliver vehicles with stripped-down equipment. A later retrofit is not possible for technical reasons, explained the Mercedes manufacturer and risks annoying some customers. How many ordered cars the company has already delivered with reduced equipment is unclear, however.
More: The lack of chips hits truck manufacturers particularly hard