CEO says Volkswagen has 'seen the worst' of the chip shortage

CEO Herbert Diess instructed CNN Business on Thursday that the world’s second largest automaker has “seen the worst” of a chip scarcity that badly dented its third quarter earnings.

“We had really a challenging quarter,” Diess instructed Anna Stewart throughout an interview. “We have better [chip] supply now and hopefully months after months we can increase.”

The German firm, which owns a number of manufacturers, together with Audi and Skoda, stated that working revenue fell 12.1% from the identical interval final 12 months to €2.8 billion ($3.3 billion). Deliveries dropped 24% to 1.97 million items.

Volkswagen (VLKAF) stated in a press release that the chip crunch had “disproportionately affected” its enterprise in China.

A extreme scarcity of semiconductors — tiny pc chips used to make important parts of automobiles, together with driver help methods — has delayed automotive manufacturing and compelled some vegetation to close down.

The provide of automobiles didn’t hold tempo this 12 months as nations emerged from pandemic lockdowns and client demand surged, pushing new and used automobile costs to new heights.

Consulting agency AlixPartners forecasts that the shortage of chips, coupled with a raft of different uncooked materials shortages, will value the automotive trade $210 billion this 12 months, and minimize car manufacturing by 7.7 million items.

Stellantis, fashioned by final 12 months’s merger of Fiat Chrysler and French automaker PSA Group, stated Thursday that the chip scarcity led to a 30% lack of deliberate manufacturing final quarter, or about 600,000 automobiles.

Diess stated that Volkswagen’s provide chain bottlenecks would ease within the coming months, with enhancements anticipated “quarter over quarter” in 2022. He stated the corporate has been “stockpiling” and was working to make its provide chains extra “robust and resilient.”

Diess stated that electrical car gross sales doubled in comparison with final 12 months, and that some Volkswagen manufacturers can be launching new electrical fashions within the coming weeks.

“Hopefully we can catch up with Tesla (TSLA),” he stated.

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