BMW warns chip supply shortage 'critical', output to suffer

FILE PHOTO: A logo of German luxury carmaker BMW, is seen ahead of the company's annual news conference in Munich, Germany, March 20, 2019. REUTERS/Michael Dalder

FRANKFURT (Reuters) - BMW warned a chip shortage that has plagued the car industry may lead to further lost production, saying on Friday it showed no signs of abating and supply would remain tight in the second half of the year.

Production was being halted at various sites, either on a daily basis or individual shifts, Milan Nedeljkovic, BMW board member in charge of production said, adding that lost output was around 30,000 "units" so far this year.

He added further shortfalls were possible.

"Semiconductor supply is really critical," Nedeljkovic told reporters at an event to mark the start of serial production of BMW's iX electric sport utility vehicle.

"The outlook for the second half of the year, too, remains critical. The ... initial assumption, that it will be brought under control fairly soon and be covered more or less in the first half of the year, is difficult."

Nedeljkovic made the comments as BMW said it plans to significantly ramp up production of electric vehicles at its Dingolfing plant, which accounted for more than a tenth of its total production last year, helped by its iX SUV.

The luxury carmaker said it made more than 18,000 electric cars at the site last year, accounting for about 8% of production, adding that share will be doubled to 16% in 2021.

BMW also said that half of the vehicles produced at Dingolfing would be electrified by the middle of the decade.

(Reporting by Christoph Steitz; Editing by Kirsti Knolle and Alexander Smith)

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