Saturday, November 27

Delivery forecast lowered: lack of chips slows down Volkswagen

As of: 10/28/2021 9:41 a.m.

Germany’s largest car manufacturer, Volkswagen, is feeling the consequences of the shortage of chips more and more clearly. Sales are falling and the group has also lowered its estimate for deliveries this year.

At the Volkswagen Group, the production stops due to the lack of chips are leaving their mark. Due to the supply bottlenecks and delivery failures for electronic components, the company has to cut back on deliveries. In the current year they would only be at the level of the previous year, said Volkswagen. So far, sales for 2021 had been expected to be noticeably higher than the previous year’s level.

Chief Financial Officer Arno Antlitz stated that the semiconductor bottleneck had clearly shown in the third quarter that Volkswagen was not yet able to withstand fluctuations in capacity utilization.

The consequences of the lack of chips can also be seen in the balance sheet: In the third quarter, sales fell by 4.1 percent to 56.9 billion euros. Adjusted for special items, operating profit fell by 12.1 percent to 2.8 billion euros.

The bottom line was a surprising increase in profit: The net result increased by 5.6 percent to 2.9 billion euros. Changes in the financial and investment result as well as in taxes played a role here.

Employees fear for their jobs

In the past few months, Volkswagen had to repeatedly stop the production line and temporarily send employees home due to missing parts. At the main plant in Wolfsburg, for example, according to the works council, many employees are insecure and fear about their jobs. During short-time work, the usual surcharges on which many people in the region rely are no longer applicable.

In addition to material bottlenecks, which experts believe will drag on until next year, the plant has to cope with the transformation. Wolfsburg is one of the few VW plants that has not yet been awarded a contract to build a high-volume electric car that could ensure sufficient capacity utilization.

Statements by CEO Herbert Diess, who sees up to 30,000 jobs in Germany at risk if the conversion of Volkswagen into a leading manufacturer of e-cars and software-based services that he is pushing for, did not succeed, had recently caused additional unrest.

Ford sees signs of hope

The lack of chips also has consequences for the competitor and Opel parent company Stellantis: Over the course of the year, the world’s fourth largest car manufacturer will produce more than 1.4 million new cars less than originally expected. In the past quarter, vehicle sales fell by 27 percent, while sales fell by 14 percent to 32.6 billion euros.

Ford also complained of falling sales and profits in the past quarter: the bottom line was that the company earned $ 1.8 billion, around 600 million less than a year ago, and revenues fell by five percent to $ 35.7 billion. However, analysts had expected greater losses. Ford also stated that the supply situation has now eased significantly.

Overall, the industry expects the chip supply to stabilize in the next year and to be able to catch up with part of the lost production. However, some managers, including Daimler boss Ola Källenius, consider it possible that the effects of the delivery bottlenecks will drag on into 2023.

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