Dragged down by the global Covid-19 epidemic, the chip shortage in the auto industry is difficult to ease in the short term.

Volkswagen said in a statement on Friday that it will need to adjust its global production schedule for the first quarter due to the chip shortage but did not provide specific figures.

Volkswagen warned that it will suffer massive production disruptions in the first quarter of next year due to a shortage of semiconductors.

The carmaker said that the chip shortage will threaten global car production and bring major manufacturing disruptions and supply chain problems could prevent Volkswagen from successfully starting its recovery plan next year.

The statement said:

As a result of the Covid-19 pandemic and the ensuing sales slump in the automotive industry, leading semiconductor manufac-turers had reassigned their production capacities to other customer sectors such as consum-er electronics.

However, automobile markets have now recovered significantly and the industry, including the Volkswagen Group, faces a shortage of the electronic components required.

For this reason, the Volkswagen Group needs to adapt production at its various Chinese, North American, and European locations to the current supply situation in the first quarter of 2021, it said.

At the same time, Europe's second-largest auto parts maker, one of the largest suppliers of Volkswagen Continental also said that the possibility of production disruptions caused by chip shortages cannot be ruled out.

Continental also said that because the semiconductor industry usually requires long lead times, it will take a long time to meet the additional demand, and the potential bottleneck will continue until 2021.

The global chip shortage will also affect China, which relies on overseas suppliers for components such as semiconductors.

The global automotive chip market will be about $47.5 billion in 2019, but the size of China's chip industry for its own-brand car companies is less than RMB 15 billion, or about 4.5% of the world. In contrast, the size of China's automotive industry accounts for more than 30% of the global market.

Earlier this month, a spokesperson for Nio told cnTechPost in Chinese which translated as "there is no impact at this time, Nio has been prepared in advance."

Chinese media quoted Xpeng and Li Auto as saying that they were not affected and that production and operations were normal. Previous data showed that although some of the new carmakers in China have a triple-digit year-on-year growth rate in monthly deliveries, they are less affected because their base is smaller and they take up fewer resources for components, including chips.

BYD also said that it has a whole industrial chain in new energy batteries, chips, etc., and it can not only be fully self-sufficient, but there is also spare capacity for external supply.