BMW chief executive Oliver Gypsy said in an interview with the New Zeitgeist Zeitung newspaper that the chip deficit could widen by 2023. Arno Antlitz, CFO of Volkswagen, gave a similar message over the weekend, adding that his company would not be able to meet demand until 2024.

Speaking as president of the European Automobile Manufacturers Association, Gypsy said last month that “the gravity of the situation requires a strong and coordinated response across the European Union.” This could be worse before it gets better because the difficult geopolitical situation in Ukraine could hamper the supply of neon. A great gas, used by neon lasers to make much needed semiconductor chips. With about 70% of the world’s neon output coming from Ukraine, a shortage of microchips could further affect the car industry. Automotive News U.S. chip makers rely “almost entirely” on neon from Ukraine and Russia, according to market research firm Texet. The country hosts both the raw materials and gas needed to make microchips.

bmw i4 Production Plant Munich 16 830x467

The coronavirus epidemic has forced many car manufacturers to significantly reduce production due to missing semiconductors, losing valuable sales while creating frustration among buyers. But for some dealers, the microchip deficit has become a blessing in disguise because customer demand is so high that dealer lots are available, salespeople accept incentives and stop giving deals.

Despite all the challenges, BMW has announced that the original brand will be able to sell more than 2.2 million units by 2021 – 2,213,795 units. This represents a 9.1% increase over the previous year and confirms BMW’s position as the leader in the luxury car segment.

[Source: Reuters]