Daimler Trucks says it’s facing enormous supply chain pressure

Supply chain disruptions are still happening globally, and the head of the world’s largest truck maker has warned that parts shortages are slowing the production of thousands of their vehicles.

Daimler Trucks Chief Executive Officer Martin Daum told CNBC on Wednesday that the current supply chain squeeze is one of the worst he’s seen in his more than 25-year career, leading to massive bottlenecks across the globe. corporate branding.

“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 it was one of the worst years of my long trucking career, where we sometimes had to touch a truck three or four times to replenish missing parts. ,” he added.

Truck manufacturer Mercedes-Benz said earlier this month that there are signs that the lingering chip shortage appears to be easing. Microchips, or semiconductors, are a vital component of modern car manufacturing, and they fell into short supply during the peak of the Covid-19 pandemic and the consequent factory closures. .

But Daum says other parts shortages are also continuing to slow production of thousands of trucks across its international network of factories.

“We have, in a few factories, over 10,000 trucks where one or two parts are missing and we search the world desperately for those parts,” he said.

Supply chain disruptions are causing production backlogs at the world’s largest truck manufacturer, Daimler Trucks.

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Inflationary pressures are also weighing on Daimler Truck’s production, as energy and raw materials costs are currently significantly higher – with some price hikes easier than others.

“We are driving the price increase on raw materials at the moment, so at least we can keep our profits in that business,” he said. The company is also negotiating a salary increase for employees.

However, the truck maker, whose other brands include Freightliner, Western Star and Fuso, noted some bright spots. In the United States alone, Daum said, it sees demand for about 200,000 trucks being held back as it continues to catch up with supply shortfalls through 2020 and 2021.

“That, in my view, makes me optimistic that we will see a 2023 that is not too bad. And not too bad is a manifestation of the Germans suggesting it could be a good 2023. “, he said.

Daimler Trucks last month reported an 8% increase in first-quarter sales year-over-year, with group revenue up 17% year-on-year.

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