BERLIN (Reuters) -An absence of wiring harnesses from Ukraine has overtaken a scarcity of semiconductors as Volkswagen’s greatest provide chain headache because the Russia-Ukraine conflict clouds its prospects for this 12 months, the world’s No.2 carmaker warned on Tuesday.
Rising uncooked materials prices will drive up costs for each electrical and inner combustion engine automobiles, Chief Monetary Officer Arno Antlitz stated, with all the pieces from batteries to catalytic converters set to change into dearer.
In mild of rising instability in Europe, boosting gross sales in China – the place Volkswagen at the moment has 16% market share and goals to double battery-electric automobile gross sales this 12 months – is an excellent increased precedence than earlier than, CEO Herbert Diess added.
“The conflict within the Ukraine has put our present outlook into query,” Diess stated on the German group’s annual press convention following Friday’s 2021 outcomes, warning commodity markets are prone to stay unstable till 2026.
Rival Tesla on Tuesday raised costs in China and the USA for the second time in days after its CEO famous surging uncooked supplies and logistics prices.
Diess stated Volkswagen had change into extra resilient via the coronavirus pandemic and beneath regular circumstances would have motive for optimism for 2022.
The group minimize overhead prices forward of schedule final 12 months, resulting in 4 billion euros ($4.4 billion) of advantages in contrast with 2019, stated Antlitz.
The potential preliminary public providing (IPO) of sports activities automobile model Porsche will present further flexibility, he stated, including an IPO might nonetheless occur as quickly because the fourth quarter of 2022, regardless of present market uncertainties.
Nevertheless, a halt in provides of wire harnesses, which bundle as much as 5 km (3.1 miles) of cables in a automobile and are distinctive to every mannequin, might drive Volkswagen to revise its outlook if different sources should not present in 3-4 weeks, Diess stated.
The carmaker is relocating manufacturing from Ukraine to North Africa and Jap Europe – a course of which isn’t difficult however time-consuming, the CEO stated.
Volkswagen bought two million fewer vehicles than deliberate final 12 months resulting from semiconductor shortages and stated that, whereas the state of affairs ought to enhance this 12 months, there might nonetheless be a drag on progress.
The carmaker stated on Friday its working revenue doubled in 2021 to only beneath 20 billion euros due to increased costs and a beneficial product combine, regardless of complete unit deliveries hitting a 10-year low of 8.9 million.
Trying ahead, it expects to extend deliveries by 5-10% in 2022 and enhance revenues by 8-13%, it stated on Friday.
Each Volkswagen and Japan’s Toyota suspended manufacturing quickly at some crops in China amid COVID-related lockdowns, with Toyota warning on Tuesday the suspensions might final a number of extra weeks.
($1 = 0.9081 euros)
Reporting by Victoria WalderseeEditing by Louise Heavens and Mark Potter
