Stellantis CEO sees chip supply crisis hitting carmakers 'hard and strong'


FILE PHOTO: The logo of Stellantis is seen on a company's building in Velizy-Villacoublay near Paris, France, May 5, 2021. REUTERS/Gonzalo Fuentes

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MILAN (Reuters) -A global crisis in microchip supply was hitting the automotive industry "hard and strong," Stellantis CEO said on Wednesday, and carmakers would have to completely rethink semiconductor supply chains.

Carmakers across the world have had to curb output due to a shortage of chips used in everything from computer management of engines to driver assistance systems, which is hampering their recovery from the pandemic.

"The longer the chip crisis lasts, the harder it will be to sustain the auto industry's current business model," Stellantis boss Carlos Tavares told an FT web conference.

Stellantis, the world's fourth largest car maker, last week said the chip shortage should improve in the second half of this year, but said the disruption to the auto industry could last into 2022.

Tavares said on Wednesday the industry was also facing a raw material inflation issue and the solution was increasing the use of renewable raw materials.

He also said the challenge for the industry was keeping clean mobility "affordable", noting that a shift to electric vehicles was a top-down decision imposed with "brutality" by governments and not decided by carmakers.

"If you offer clean mobility only affordable to rich customers, then you will not have a significant impact on carbon emissions," he said.

"It's hard to sell a 30,000 euro battery electric car when people can buy the correspondent traditional model for half the price."

Stellantis was formed at the beginning of this year through the merger of Fiat Chrysler and Peugeot maker PSA, with 14 brands under its roof, including premium brands Alfa Romeo, Lancia and DS, and luxury Maserati.

Tavares said the group had room for all three premium brands.

"They're perfectly complementary," he said.

"I don't think autonomous drive will ever take over completely, there will always be room for the pleasure of driving."

(Reporting by Giulio Piovaccari and Nick Carey, editing by Jane Merriman)

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