Daimler CEO hopes to stabilize supply chain this quarter

October 22, 2021

By Joseph White

DETROIT (Reuters) – Daimler AG Chief Executive Ola Kaellenius told Reuters on Friday the automaker hopes to stabilize its supply chain for semiconductors during this quarter, but expects real relief from shortages of chips will not arrive until 2023.

Kaellenius, who is visiting Mercedes operations in the United States, said production of Mercedes vehicles during the fourth quarter will be lower than a year ago, which was an unusually strong quarter as the company began recovering from pandemic shutdowns.

“We cannot have 100 percent certainty” about supplies of semiconductors, Kaellenius said. COVID-related shutdowns this summer at Malaysian plants that process semiconductors set back the auto industry’s efforts to recover production lost earlier in the year.

“We hope to be able to stabilize the situation in the fourth quarter, and take that to the next level in 2022,” he said. However, he said, major chip producers are saying restrictions in supply could continue into 2023.

“We have to stay flexible,” Kaellenius said.

Daimler is managing supply-chain disruptions on top of planning for a split of the company into a standalone luxury vehicle company, Mercedes-Benz, and a separate commercial truck business. Mercedes is accelerating its shift to an all-electric lineup by 2030.

Mercedes is launching an electric top-of-the-line sedan, the EQS, and is preparing to launch production of an electric EQS SUV at its factory in Alabama that will go on sale next year.

“We are trying to speed up the transition” to electric vehicles, Kaellenius said.

The EQS sedan and SUV should be “profitable from the word go” in the U.S. market, he said.

(Reporting by Joe White in Detroit; Editing by Matthew Lewis)

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