VW’s China sales hit by lockdowns and semiconductor supply issues
Volkswagen’s sales in China slowed significantly in the first three months of the year as further Covid shutdowns and continued supply chain disruption hit production in its biggest market.
China shipments fell nearly 24% in the three months to the end of March, which VW said was due to “global structural semiconductor bottlenecks and pandemic restrictions in various cities across China.” since the beginning of the year “.
The VW Porsche brand, which the group hopes to partially launch later this year, suffered a 20% drop in deliveries in China.
VW’s latest figures come after the Covid lockdown in Shanghai was widened to include the nearby city of Kunshan, where several key electronics makers are based. An estimated 45 cities and 370 million people in China are under full or partial lockdown as coronavirus cases rise.
VW has been directly hit by outbreaks in Changchun and Shanghai, the sites of its joint ventures in China, while a fifth of its dealerships in the country were forced to close in March due to the virus.
The situation means VW is “temporarily unable to meet strong customer demand”, said Chinese boss Stephan Wöllenstein, adding that he hoped VW would be “able to catch up on the production backlog in the coming months”. , once the economy reopens. .
VW missed its target of selling between 80,000 and 100,000 of its new ID electric vehicles in China last year, blaming semiconductor shortages.
It is targeting ID sales of at least 140,000 in 2022, but said it only sold 27,100 in the first three months of the year.
VW, the world’s second largest automaker by volume, also saw a 15% slowdown in sales in Western Europe and a 19% drop in North America. Nevertheless, the company announced a provisional operating profit of around 5 billion euros in the first quarter of the year, excluding exceptional items, compared to 4.8 billion euros in the same period in 2021.
Another 3.5 billion euros in paper profits were made largely on commodity hedges which proved beneficial to VW as prices soared.
But he warned that “the effects of the aftermath of the war in Ukraine still cannot be predicted with sufficient certainty” and that there was a risk that the conflict, as well as the bottlenecks in the supply chain supply and semiconductors, have “a negative impact”.
It is expected to release full quarterly figures in early May.