Supply chain disruptions are still brewing around the world, and the head of the world’s largest truck maker has warned that parts shortages are slowing production of thousands of its vehicles.
Daimler Trucks CEO Martin Daum told CNBC on Wednesday that the current supply chain squeeze is the worst in his more than 25-year career, resulting in major bottlenecks in the company’s suite of brands.
“We are facing enormous pressure on the supply chain,” said Daum, whose trucks are used for other important industries such as logistics and construction.
“I would say this is by far one of the worst years in my long career in trucking, where we sometimes have to touch a truck three, four times to reattach missing parts,” he said. .
Mercedes-Benz Truck Manufacturer said earlier this month that there are signs that long-term chip shortages appear to be easing, Microchips, or semiconductors, are a vital component of modern auto manufacturing, and they fell into short supply during the height of the Covid-19 pandemic and the resulting factory closures.
But Daum said other parts shortages also continue to slow production of the thousands of trucks in its international network of factories.
“We have over 10,000 trucks in some factories where one or two parts are missing and we are looking for those parts in the world,” he said.
Supply chain disruptions are causing a production backlog at Daimler Trucks, the world’s largest truck maker.
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Inflationary pressures are also taking a toll on Daimler truck production, as energy and raw material costs are now significantly higher – some price hikes are easier than others.
“At this point in time, we’re going to push up on raw material price hikes, so we can at least maintain our margins in that business,” he said. The company is also negotiating a salary hike for employees.
Still, the truck maker, whose other brands include Freightliner, Western Star and Fuso, saw some bright spots. In the United States alone, Daum said, it sees an increase in demand for some 200,000 trucks as it continues to hold supply crunches through 2020 and 2021.
He said, “In my opinion, it makes me optimistic that we will not see 2023 too bad. And not too bad is the German expression because this 2023 could be good.”
Daimler Trucks last month First quarter sales posted an 8% year-over-year increase, with the group’s revenue up 17% over the same period.