Daimler has the final word on Chipageddon
Over the past four weeks, we have delved into the impact of Chipageddon on South African truck suppliers and transport operators. Chipageddon is the name that has been coined for the shortage of semiconductors (also referred to as “computer chips”). In this article, the final in the series, we speak to Michael Dietz, CEO of Daimler Trucks & Buses Southern Africa, and find out how this company is being affected by the global crisis.
CV market impacted
According to information provider IHS Markit, it took a while for the effects of Chipageddon to reach the Medium and Heavy Commercial Vehicle (MHCV) sector, but the impacts are now visible. “Several MHCV OEMs will face constraints in the second quarter. Combined with other supply-side challenges, these losses may net out as much as 3% of first-half 2021 production in some regions, including Europe and North America,” it warns.
The company reveals that many truck companies have been hard hit by Chipageddon. These include:
- Volvo closed its plant in Ghent, Belgium, for one week leading to a reduction of about 550 units
- There were two to four week stoppages at the plants of Volvo and Renault Trucks as well as Ford Otosan in Turkey
- In North America, Daimler (rolling downtime in two medium-duty plants), Volvo Group and PACCAR were impacted (-3,000 units in Q1)
Monitoring the situation
Given these developments, Dietz says that Daimler Trucks & Buses Southern Africa is monitoring Chipageddon very closely. “We are aware of the current critical supply situation in the semiconductor market, which also has an impact on the supply chain of Daimler Trucks & Buses. We are monitoring the situation closely and are in constant contact with our suppliers. Due to the high level of flexibility in our plants, we can react to such fluctuations at short notice and adapt our production programme accordingly,” he explains.
Daimler Trucks & Buses Southern Africa is in the fortunate position of having sufficient stock. “Right at the start of the pandemic, we decided to place some rather substantial orders for stock. Honestly, my German colleagues were a bit unsure about this. This has placed us in a very strong position as the market has strengthened. Whereas some of our competitors have been unable to meet demand, we’ve had stock,” says Dietz.
East London plant currently unaffected
Of course, that was before Chipageddon reared its ugly head – and so that situation could always change. “But, for now, things are okay. At the present moment, there is no impact on our local production plant in East London. We are working very closely with our source plant to minimize any impacts on our customers locally. Should there be any changes, our source plants have committed to inform us immediately,” Dietz assures customers.
The good news is that Dietz does not see truck prices rising as a result of shortages caused by Chipageddon. “We have no price increases planned due to product shortages,” he reveals.
Some industry commentators believe that demand in the used truck market could grow as a result of shortages caused by Chipageddon. Dietz says he’s already seeing growth in this market. “For several reasons, there is already quite a large increase in demand for used trucks and this trend will continue into the foreseeable future,” he predicts.
TruckStore relocates
The company is well poised to cope with this growth, given the fact that TruckStore – the used trucks & buses retail outlet of Daimler Trucks & Buses Southern Africa – recently relocated to a bigger facility to accommodate growing customer demands and future growth plans. Located on a 30 000 m2 site – in Centurion, a stone’s throw away from its old premises – the new facility benefits from the excellent N1 highway visibility.
The facility has ample parking for large vehicles and features a 1 200 m2 showroom. At the rear of the facility is a 3 000 m2 fully-equipped and dedicated Mercedes-Benz approved workshop and parts centre for Mercedes-Benz TruckParts and Fuso Value Parts. Included also are ten dedicated bus service bays. The workshop also provides capacity for non-Daimler brands as well as servicing of trailers.
Upbeat for the future
While issues such as Chipageddon will remain a concern, Dietz is upbeat for the future. “As Daimler Trucks & Buses Southern Africa, our ambition is to remain the truck and bus brand our customers want to associate with. Daimler Trucks & Buses Southern Africa always prides itself on being solution-oriented, and we will continue working this way as we navigate through these unique challenges,” he concludes.
