You are using an older browser version. Please use a supported version for the best MSN experience.

Volkswagen lowers sales outlook as chip shortage hits profit

The Independent logo The Independent 28/10/2021 Associated Press reporter
Volkswagen reported a decrease in operating profits for the third quarter (Mike Egerton/PA) - PA Archive © PA Archive Volkswagen reported a decrease in operating profits for the third quarter (Mike Egerton/PA) - PA Archive

Volkswagen lowered its forecast for deliveries to customers and reported a decrease in operating profits for the third quarter as the global shortage of semiconductors disproportionately hit the company’s business in China despite strong demand for its cars there.

The company said deliveries in 2021 would be in line with last year’s.

Previously, Volkswagen expected an increase in unit sales. It said operating profit fell 12% to 2.8 billion euros (£2.3 billion) compared to the year-earlier quarter, which also was weak due to the coronavirus pandemic.

The company, based in Wolfsburg Germany said its volume brands such as its flagship Volkswagen nameplate recorded operating losses despite full order books. It lost 24% of its unit sales in its home market in Europe compared with the year-earlier period.


Video: Industry expert predict chip shortage to persist through next year (CNBC)

UP NEXT
UP NEXT

Chief financial officer Arno Antlitz described the results as a challenge to make “decisive improvements” in keeping costs down and improving productivity.

He said in a statement accompanying the earnings release: “The semiconductor bottlenecks in the third quarter made it abundantly clear to us that we are not yet resilient enough to fluctuations in capacity utilisation.”

Semiconductors are widely used in automotive electronics. Demand for their use in everything from game consoles to tablets to webcams has exceeded the ability of chip makers to quickly increase production capacity, and the entire auto industry has been impacted.

Volkswagen’s push into electric vehicles continued during the quarter with 122,100 all-electric vehicles sold, more than twice the number in the year-earlier period despite the semiconductor shortage.

From news to politics, travel to sport, culture to climate – The Independent has a host of free newsletters to suit your interests. To find the stories you want to read, and more, in your inbox, click here.

AdChoices
AdChoices

More from The Independent

The Independent
The Independent
image beaconimage beaconimage beacon