WHETHER buying computer chips directly from manufacturers, reconfiguring cars, or producing them with parts missing, automakers are having to get creative to cope with the global shortage of semiconductors.

The shortage, due to supply problems and a surge in demand for consumer electricals during the pandemic, has hit the auto industry hard, with millions of vehicles worldwide not being produced because important parts are missing.

With the problem lasting longer than initially expected, manufacturers including Daimler and Volkswagen have had to rethink production strategies.

Car manufacturers usually buy parts from major suppliers such as Bosch and Continental, which in turn buy from suppliers further down the chain.

In some cases that has led to a lack of transparency, said Ondrej Burkacky, a senior partner at McKinsey.

“There was the fallacy of thinking that you had a choice between two suppliers, but the truth is that they both had the chips made in the same foundry,” he said.

That is now changing, according to Daimler Purchasing Manager Markus Schäfer.

The German maker of Mercedes-Benz cars has set up a direct line of communication with all chip suppliers, he said at the IAA auto show in September.

Volkswagen boss Herbert Diess spoke of “strategic partnerships” his company has entered into with manufacturers in Asia.

Chip suppliers need to be treated differently given their strategic importance to the industry, said Stefan Bratzel from the Center for Automotive Management.

“You have seen the problems that arise when you treat the chip companies like other suppliers and stop the calls,” he said.

McKinsey’s Burkacky said carmakers should consider direct investments in production, or longer contracts with terms of more than 18 months.

In the meantime, vehicle developers are doing their part to help manufacturers manage the supply crunch.

Annette Danielski, chief financial officer of Volkswagen’s trucking unit Traton, said the company was trying to clear some space on the motherboards of control systems.

Daimler relies on new designs for control units. Rather than using one specific chip, these are designed to work with an alternative that can be used in the event of delivery problems.

General Motors has said it will work with chip manufacturers like Qualcomm, STM and Infineon to develop microcontrollers that combine several functions previously controlled by individual chips.(SD-Agencies)