Semiconductor Shortage Forces Škoda Auto to Downsize Operations


Škoda Auto, the Czech Republic’s trademark car company, is being forced to downsize its operations in reaction to a shortage in semiconductors stemming from the COVID-19 restrictions.


Auto sales collapsed during the beginning of lockdown in 2020, leading to a gridlock in orders for car-related semiconductors. As demand for cars recovers, supply chains are having trouble revamping themselves.


In an interview with iHNED.cz, Michael Oeljeklaus, head of production and logistics at Škoda, said that the company is producing 3,000-5,000 fewer cars than what they’re capable of, and some cars that are being produced can’t be finished due to lack of parts. According to him, by early August the company will have produced roughly 50,000 incomplete vehicles that will sit idle in a parking lot until equipped with a chip.


Škoda is currently negotiating with unions to keep production flowing through what was supposed to be a company-wide holiday during the first two weeks of August.


“We would like to complete 20,000 cars in those two weeks, which are now standing on our parking lots.”


While the situation looks grim, Oeljeklaus hopes that a sufficient amount of semiconductors will be back on the market by sometime in the fourth quarter.


“In the fourth quarter, the market will return to normal and we believe that there will be enough parts to complete the cars that are sitting parked in the meantime.”


At time of writing, Škoda has 33,000 unfinished cars sitting in their parking lots, and the lots themselves only have a capacity of about 55,000.


Škoda has three production facilities in the Czech Republic, with locations in Mladá Boleslav, Kvasiny and Vrchlabí. Earlier this year, the car manufacturer announced it was investing €2.5 billion into new production facilities, digitization, and electromobility.

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