Volkswagen lowers car deliveries outlook over chip woes

play article
Subscribers can listen to this article
A Volkswagen dealership.
A Volkswagen dealership.

German carmaker Volkswagen posted strong first-half profits on Thursday but cut this year's forecast for car deliveries over a worsening shortage of semiconductor chips.

The 12-brand group - including Porsche, Audi, Seat and Skoda - nevertheless lifted its profit target for 2021 after high-end vehicles drove a "record" performance over the first six months.

VW said it was now targeting an operating return on sales, a closely-watched measure of performance, of 6.0 to 7.5%. The previous goal had been 5.5 to 7.0%.

Adjusted operating profits, before special items, reached 11.4 billion euros (R200 billion), higher than the 10 billion euros achieved over the same period in pre-crisis 2019 - the year before coronavirus lockdowns pummelled the auto industry.

VW chief executive officer Herbert Diess welcomed "the record result".

"The premium segment performed especially well with double-digit returns," he said in a statement.

But while the group said it had managed to contain the impact from the global shortage of semiconductors so far, the fallout would likely be "more pronounced" in the third quarter.

Like other carmakers, VW has recently been forced to trim production at some plants because of a supply crunch of the crucial computer chips, fuelled by a pandemic-driven surge in demand for home electronics.

The effects could already be felt in key market China, where VW said it had recently recorded declines.

"The risk of bottlenecks and disruption in the supply of semiconductor components has intensified throughout the industry," VW said, adding that it was lowering its full-year deliveries forecast.

It now expects deliveries to customers to be "noticeably up" on 2020, assuming the economic recovery from the pandemic stays on track.

VW had previously estimated that deliveries would be "significantly" higher.

Diess also noted that the group's e-offensive was "picking up momentum", with 171 000 all-electric vehicles delivered worldwide, a jump of 165% year-on-year.

The group, which is spending tens of billions of euros on the industry-wide shift towards greener cars, has set its sights on become the world leader in electric vehicle sales.

VW expects battery-powered cars to make up half its sales by 2030, and "almost 100%" by 2040.

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For only R75 per month, you have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today.
Subscribe to News24
Rand - Dollar
Rand - Pound
Rand - Euro
Rand - Aus dollar
Rand - Yen
Brent Crude
Top 40
All Share
Resource 10
Industrial 25
Financial 15
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Voting Booth
Facebook is facing a fresh crisis after a former employee turned whistle-blower leaked internal company research . Do you still use Facebook?
Please select an option Oops! Something went wrong, please try again later.
Yes, the benefits outweigh the risk for me
23% - 159 votes
No, I have deleted it
47% - 328 votes
Yes, but I am considering deleting it
30% - 204 votes