By Victoria Waldersee
BERLIN (Reuters) – Volkswagen believes supply chain problems are the new industry norm but still expects growth in the auto market next year as some production bottlenecks are expected to ease.
The automaker has lowered sales expectations this year to be at the same level as in 2021. The previous forecast was for growth of 5% to 10%. But the company maintained its view of the profit margin hitting the upper end of the 7% to 8.5% band through fixed cost cuts.
The company’s third-quarter profit stagnated, falling below its pre-pandemic level by 4.3 billion euros. Performance was pressured by costs related to Porsche’s IPO, suspension of business in Russia, write-off of a self-driving technology startup, as well as problems with parts supply.
A shortage of electronics and other critical parts means the automaker has 150,000 unfinished vehicles in yards and is being forced to stockpile supplies to protect against further shortages later in the year, Chief Financial Officer Arno Antlitz told analysts. and investors.
“Challenges to our supply chain will become the rule, not the exception,” said Volkswagen Chief Executive Oliver Blume. He also cited barriers to technology transfer between West and East.
The group-wide 6% margin was driven by sports and luxury brands, which are better able to pass on rising costs to prices than volume brands whose buyers are pressured by inflation.
The company has assumed a non-cash charge of 1.9 billion euros related to the write-off of its investment in Argo AI, a self-driving technology startup co-created with Ford, but which will cease operations.
Volkswagen and Ford on Wednesday announced the end of investment in the business, which caused Ford to suffer a net loss on account of a pre-tax charge of $2.7 billion.
Volkswagen remains committed to Level 4 autonomous driving, and will decide next month whether to move forward in the area with a new partner, Blume said.
#Volkswagen #supply #chain #problems #stay