BERLIN -- Germany's car industry cut its forecast for production growth this year, indicating that the recovery from the coronavirus pandemic will be bumpy as automakers battle supply-chain disruptions, including a shortage of semiconductors.
The VDA industry association cut its forecast for production growth to 3 percent from 13 percent previously, saying that production in recent months had been "significantly below expectations."
It now expects 3.6 million cars to be made in Germany this year, down by 400,000 units from its last forecast, the VDA said in its mid-year market update.
The German car industry, which includes powerful brands like Volkswagen, Daimler and BMW, accounts for an estimated 5 percent of the economic output and more than 800,000 jobs, making it a bellwether for Europe's largest economy.
Automakers idled production early in the pandemic in anticipation of a go-slow by car buyers and have been caught short by a snapback in demand as economies have reopened this year.
German car production, at 1.73 million units, was up 16 percent in year-on-year terms in the first half of 2021. But, in an indication of the difficulties, output was down 19 percent in the month of June, the VDA figures showed.
New-car registrations rose in Germany in the first half of the year by 15 percent to 1.39 million units.