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Chip Shortage Leads To Less Production of Daimler Trucks

TNI || New Delhi || 6th Oct 2021

Martin Daum, CEO of Daimler Trucks, has said the truckmaker, which is set to spin-off from Daimler at the year-end, due to chip shortage, will continue selling fewer vehicles than it could have in the coming year.

As per Daum, the company will certainly be delivering fewer vehicles than what they are conditioned to, and this scenario will apply for the next year as well.

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Martin was speaking at a roundtable with Journalists and echoed the recent warnings given out by competitors like Traton, which has already predicted that profits would fall further due to supply chain issues.

He added that there is a fight over every chip now. According to Martin Daum, the passenger car vehicles like BMW or even Daimler can increase vehicle prices to complement chip losses, but commercial vehicles do not have that kind of flexibility.

The company, according to him, has been committed to a 15% reduction in cost from 2019 by 2025 and the mentioned cuts have already started.

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The trucks and buses business of Daimler reaped annual profits of around 2 billion euros prior to the pandemic.

Daimler Trucks will become the world’s largest truck maker after the spin-off with Daimler will be approved by the shareholders in complete by coming Friday.

Although chip troubles and lack of infrastructure has caused troubles to hydrogen and electric trucks, Daimler is betting on for 60% increase in its revenues by 2030.

The latest results aren’t in favor of the truckmaker, though, as it is lagging behind Traton’s Scania and Volvo Trucks.

In a significant move for the industry, Daimler will start the production of its first electric truck series called eActros from this week in Germany. But the high cost of its production would mean that the truck will be three times costlier than its diesel counterpart.