Volkswagen AG expects easing supply bottlenecks and existing orders to boost sales this year even as shortages of semiconductors in 2022 led deliveries to an 11-year low.
(Bloomberg) — Volkswagen AG expects easing supply bottlenecks and existing orders to boost sales this year even as shortages of semiconductors in 2022 led deliveries to an 11-year low.
Group sales fell 7% to 8.3 million vehicles after supply constraints saw factories grind to a halt, Europe’s biggest carmaker said Thursday. Volkswagen pointed to a high order bank of 1.8 million vehicles in Western Europe that will help offset a sputtering global economy.
“That gives us confidence for 2023 despite weakening macroeconomics and ongoing supply shortages,” VW’s group sales head Hildegard Wortmann said in a statement. “The latter are expected to improve step by step in the course of the year.”
After protracted bottlenecks on chips, shipping and raw materials, carmakers are now saddled with a weakening outlook particularly in Europe where high energy prices are fanning record inflation. Full order books should help bolster profit well into the middle of the year, while China removing most of its Covid restrictions should see customers return to showrooms.
VW rose 0.5% at 12:55 p.m. in Frankfurt trading, taking gains since the start of the year to 10%.
During the fourth quarter, easing procurement pressures lead to a 28% surge in deliveries in Western Europe while sales in China rose 9.4%. The recovery during the last months of last year wasn’t enough to erase declines in both key regions during the first half. Volkswagen’s sales in China, its biggest market, slid 3.6% amid concerns Western carmakers are losing ground to local competitors, particularly on electric vehicles.
Electric-car deliveries rose 26% to 572,100 vehicles to account for 6.9% of the total, just missing VW’s own target of between 7% to 8%. Best-selling models included the VW ID.4 and the Audi e-tron.
(Updates with share price in fifth paragraph)
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