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© Reuters. FILEPHOTO: On October 31, 2018, workers assemble cars on the SEAT factory assembly line in Martorell near Barcelona. Picture taken October 31, 2018. REUTERS/Albert Gea/File Photo

MADRID (Reuters) – Volkswagen (DE:)’s Spanish unit SEAT plans to extend partial car assembly suspensions at its plants near Barcelona well into 2022 because of global semiconductor supply bottlenecks, the company said in a statement.

SEAT stated that the “deterioration of the supply semiconductors” now calls for reorganizing and planning new labour protocols. It also said it has begun negotiating with local unions a furlough plan to cancel certain shifts.

The company’s vice president of human resources, Xavier Ros said that the disruptions in chip supply come at a time when the demand for SEAT and CUPRA brands has returned to pre-pandemic levels.

After slowing production for the first half, the company opened its factories in August, which was an extraordinary move to make up the gap. However, the company had to close some of its operations in August.

Pandemic-related supply disruptions, key manufacturing hub lockdowns, and the high demand from the electronics sector have forced carmakers all over the globe to slow down production.

A shortage of chips has caused automakers, from the U.S.-based General Motors (NYSE) to India’s Mahindra and Daimler (OTC) in Germany and Japan to reduce their production and decrease sales projections.

Volkswagen last month stated that the situation would improve by the end this year. They also planned to offset production gaps in the second half of the year as best they could, although the chips crunch does not seem to be abating.

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