World’s biggest lorry maker says global chip shortage easing

Manufacturers had curtailed output as factories could not source enough of the high-tech components

A robot engineered by Kuka adjusts a windscreen in a fully automated process on a model of the A-class production line of German car manufacturer Mercedes Benz at the Daimler factory in Rastatt, Germany, February 4, 2019. Picture taken on February 4, 2019.  REUTERS/Kai Pfaffenbach
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Daimler Truck Holding is hopeful of moving past the prolonged chip shortage that has beset manufacturers globally, the head of the company’s Mercedes lorry brand said.

After months of factory outages due to component shortfalls, the order backlog is keeping factories busy even as the global economy shows signs of sputtering, said Karin Radstrom, who also leads the lorry maker’s business in Europe and South America.

The world’s biggest lorry maker has so far also evaded disruption from coronavirus lockdowns in China, she said.

“It’s better, it’s not perfect, but it’s better than last year,” Ms Radstrom said. “I try to not celebrate too early, we’re still monitoring the situation closely.”

Manufacturers like Daimler Truck — which also counts the Freightliner, Western Star and Fuso brands — and peer Volvo Group have had to curtail output as plants globally could not source enough of the high-tech components even as demand for transport boomed.

Ms Radstrom’s comments echo an assessment from Mercedes-Benz production chief Joerg Burzer this week. He said the chip shortage was no longer causing serious production stoppages.

A global shortage of lorries contributed to a jump in shipping rates as companies raced to restore depleted inventories.

While warnings over the health of the global economy are intensifying, Ms Radstrom said there were no signs yet of a slowdown in lorry manufacturing, typically a sector that is sensitive to downturns.

“There’s still very, very high demand relative to supply,” Ms Radstrom said. “Despite the changes in the economy, we don’t see any downturn in demand. It can change very quickly, however.”

Daimler Truck, which split from Mercedes last year, is working to improve margins after historically struggling to turn unrivalled industrial scale into returns matching those of Volvo and Paccar.

Meanwhile, electric vehicle specialists, including Tesla and Nikola, are plotting inroads into the trucking market amid the global crackdown on transport emissions.

Daimler Truck’s zero-emissions strategy focuses on developing battery-powered commercial vehicles for shorter journeys and hydrogen fuel-cell models for longer stretches.

The manufacturer last year started production of its electric vehicle eActros in Germany.

Updated: June 03, 2022, 5:00 AM