Hardware

Auto parts suppliers will try to recover damages from automakers for canceling orders

Now it has become clear to everyone that the supply chains in the automotive industry are seriously disrupted, but if until now it was about the impossibility of automakers to assemble the required number of cars due to a shortage of chips, then the claims of subcontractors risk being a new phenomenon that negatively affects the costs of auto giants.

Image source: Reuters

Image source: Reuters

Distortions in the automotive industry led to, as explains Reutersthat manufacturers of the same plastic interior and body parts faced massive refusals from customers to purchase this type of product. The need to store surplus in warehouses causes an increase in the fixed costs of component manufacturers, and some are ready to recover this damage from their customers, represented by automakers.

At least, the French company Novares is full of such determination, which is going to collect tens of millions of euros from automakers who suddenly refused to receive car interior parts in the midst of the semiconductor crisis. The decision of the auto giants to suspend the purchase of components in a situation when they are forced to stop the conveyor due to a lack of chips is quite justified. The French supplier supplies plastic parts to one in three cars in the world and has faced 2,000 refusals since the beginning of the year. About a hundred precedents were accompanied by urgent refusals, when the supplier was warned of the client’s intentions in just two days.

Now Novares is negotiating with clients who can at least partially compensate for the losses incurred due to overstocking of warehouses. Not all automakers are ready to make concessions, as the company’s management explains. Some of the losses will have to be recovered in court. Obviously, whatever the outcome of such conflicts, consumers will ultimately have to pay the costs.

About the author

Dylan Harris

Dylan Harris is fascinated by tests and reviews of computer hardware.

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