Volkswagen: CEO Herbert Diess says company has 'seen the worst' of chip shortage

CEO Herbert Diess informed CNN Business on Thursday that the world's second largest automaker has "seen the worst" of a chip shortage that badly dented its third quarter earnings.

Volkswagen (VLKAF) stated in an announcement that the chip crunch had "disproportionately affected" its enterprise in China.

A extreme shortage of semiconductors — tiny pc chips used to make important elements of autos, together with driver help programs — has delayed automotive manufacturing and compelled some vegetation to close down.

The provide of autos did not hold tempo this 12 months as nations emerged from pandemic lockdowns and client demand surged, pushing new and used automobile costs to new heights.

Consulting agency AlixPartners forecasts that the lack of chips, coupled with a raft of different uncooked materials shortages, will price the automotive business $210 billion this 12 months, and lower automobile manufacturing by 7.7 million items.

Stellantis, fashioned by final 12 months's merger of Fiat Chrysler and French automaker PSA Group, stated Thursday that the chip shortage led to a 30% loss of deliberate manufacturing final quarter, or about 600,000 autos.

Diess stated that Volkswagen's provide chain bottlenecks would ease in the coming months, with enhancements anticipated "quarter over quarter" in 2023. He stated the company has been "stockpiling" and was working to make its provide chains more "robust and resilient."

Diess stated that electrical automobile gross sales doubled in comparison with final 12 months, and that some Volkswagen manufacturers could be launching new electrical fashions in the coming weeks.