Scania halts truck production as global chip shortage crisis continues

Scania is to halt production at its European truck plants this week due to the shortage of semi-conductors, it confirmed today (31 August).

The stoppage comes as the global chip shortage, triggered by the Covid-19 pandemic lockdowns and increased consumer demand for electronic goods such as laptops and gaming devices, continues to cause major delays in internatioanl manufacturing activity, forcing truck and car manufacturers across the globe to slow down production.

Scania is pausing manufacturing at its truck plants in Sweden, France and the Netherlands for the whole week, a company spokeswoman told Reuters.

She said: “We are slowing down to a temporarily lower production volume,” adding that the company's South American plants will pause activities next week.

“They are now keeping it up for a few days when we are holding back here in Europe," she added.

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The spokeswoman said the manufacturer hopes to make up the shortfall but added “it's clear we won’t completely catch up”.

This is the first time Scania, which manufactures over 100,000 trucks and buses a year, has been forced to halt production since the Covid 19 pandemic.

Scania has been warning of the impact of the chip shortage for some time. In July at its interim results Christian Levin, president and chief executive, said that Scania had been struggling with chip shortages but had managed to avoid “unplanned production stoppages” during the second quarter, adding that the firm had suffered a “very strained situation with a shortage of components in the supply chain".

He warned at the time: “Unfortunately, we do not expect the shortage of semiconductors to end in the short term but it is something we have to continue to deal with.”

Scania is one of a number of car and truck manufacturers hit by the lack of semi-conductors. A report from Gartner predicts the chip shortage continuing to the second quarter of 2022, warning of severe disruption to the supply chain. Other analysts are warning it could continue into 2023.