Volkswagen sticks to outlook as size offset supply chain woes

FRANKFURT, Could 4 (Reuters) – Volkswagen (VOWG_p.DE), Europe’s high carmaker, on Wednesday caught to its outlook for 2022, shrugging off provide chain disruptions attributable to the struggle in Ukraine and the pandemic by drawing on its world manufacturing community.

International carmakers, like most industrial sectors, face a shortage of key elements within the wake of COVID-related lockdowns and Russia’s invasion of Ukraine, compounding an ongoing scarcity of semiconductors.

“We used our place as a very world firm to stability manufacturing throughout our markets and relieve strain the place there have been provide points and product shortages,” CEO Herbert Diess advised journalists.

“For instance after we needed to reduce manufacturing in Europe resulting from a scarcity of wiring harnesses and in some areas needed to shut down crops, we despatched the semiconductors we did not must different areas.”

Volkswagen stated it continued to anticipate gross sales to rise 8%-13%, an working revenue margin of seven.0%-8.5% and a rise in deliveries of 5-10% in 2022, pointing to its world set-up that allowed it to prioritise areas and high-margin merchandise.

“For the highest line specifically, this can be a constructive shock,” Stifel analysts wrote.

Diess nonetheless pointed to uncertainty from the battle in Ukraine and the pandemic, including the corporate might at present not foresee the total affect a deterioration of the scenario would have, together with a doable ban on Russian vitality imports.

Volkswagen, which confirmed plans to listing luxurious division Porsche AG in a partial preliminary public providing within the fourth quarter, stated it nonetheless anticipated chip provide to enhance within the second half of the yr.

The corporate, which reported preliminary outcomes for the primary quarter final month, reported gross sales of 62.7 billion euros ($66 billion) for the primary three months of the yr, up 0.6% yr on yr.

($1 = 0.9498 euros)

Reporting by Christoph Steitz; enhancing by Paul Carrel and Jason Neely

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