Mercedes-Benz CFO hopes auto industry's supply chain woes to ease in 2022 H2

German luxury car brand Mercedes-Benz hopes the supply chain bottleneck that has been impacting the global auto industry severely will not ease before the second half of this year. The automaker also expects high raw material costs and semiconductor shortage to continue to impact it from meeting strong market demand in 2022.

Mercedes-Benz Chief Financial Officer (CFO) Harald Wilhelm said on Friday that the chip capacity is coming back up, and the ongoing semiconductor shortage will ease in the second half of this year. He also said that a good chunk of raw material costs is already locked in.

"It is a matter of fact that there will be a raw material headwind, so I think we will need the volume lever to mitigate and fight it," Wilhelm said. He also added that the luxury car brand will try and see what can be done on top of 2021 in terms of the pricing. However, he also pointed out that the pricing itself will not be enough.

The automaker in January revealed that it recorded a five per cent sales decline in 2021, losing its crown for the first time in five years to BMW as the premium carmaker with most vehicles sold. A key reason behind the slump in sales was supply chain bottlenecks. The supply chain issue such as shortage of automotive semiconductors and high procuring costs of raw materials have been driving the price of vehicles higher. Also, with production being affected waiting period of vehicles too are being elongated. These are impacting sales of the vehicles.

Mercedes-Benz is not the only carmaker that has been witnessing difficulties due to a shortage of semiconductors and high raw material costs. Several other car brands across the world too have witnessed similar problems.

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