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Supplier Novares seeks damages from carmakers over cancelled orders By Reuters

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© Reuters. FILEPHOTO: Beijing’s evening rush hour is disrupted by a new coronavirus epidemic (COVID-19) on April 8, 2020. REUTERS/Tingshu Wang

PARIS, (Reuters) – French auto supplier Novares claims tens million euros of damages from customers. The damage was caused by a worldwide shortage in semiconductor chip chips. Many carmakers had to stop production or cancel orders.

Novares makes the plastic components for one of three automobiles in the world. It is now seeking to be compensated for stock pile-ups due to cancellations.

Novares CEO Pierre Boulet stated that there have been 2,000 production halts at customers since the beginning of the year. He did not say if the company is pursuing legal action.

The European situation is particularly difficult, he said, noting that the company cannot be held responsible for any financial problems faced by carmakers.

Global chips shortages and supply chain problems have caused carmakers, still recovering from the coronavirus outbreaks last year to halt production as they battle for supplies in an increasingly competitive market.

Toyota stated earlier Friday that its November production would be cut by 15%. Skoda Automobile, Volkswagen (DE:), warned the company it would reduce or suspend its production beginning Monday.

Although the automotive industry had expected improvement in the fourth quarter of 2018, issues with sourcing components from Asia may continue into 2022.

Boulet said that some clients are polite. They warn us ahead and will be ready to pay extra, while others want power struggles. We live in a selfish and macho world.

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