- Maker of VW, Porsche and Audi cars posts ‘record’ €11.4bn operating profit
- Semiconductor shortage expected to be ‘more pronounced’ later in year
German carmaker Volkswagen (VW) posted strong first-half profits on Thursday but cut this year’s forecast for car deliveries over a worsening shortage of semiconductor chips.
The 12-brand group – including Porsche, Audi, Seat and Skoda – nevertheless lifted its profit target for 2021 after high-end vehicles drove a “record” performance over the first six months.
VW said it was now targeting an operating return on sales, a closely watched measure of performance, of 6%-7.5%. The previous goal had been 5.5%-7%.
Adjusted operating profit, before special items, reached €11.4 billion euros ($13.5bn), higher than the €10bn achieved over the same period in 2019 – the year before coronavirus lockdowns pummelled the auto industry.
Double-Digit Returns
VW chief executive Herbert Diess welcomed “the record result”.
“The premium segment performed especially well with double-digit returns,” he said in a statement.
But while the group said it had managed to contain the impact from the global shortage of semiconductors so far, the fallout would likely be “more pronounced” in the third quarter.
Like other carmakers, VW has recently been forced to trim production at some plants because of a supply crunch of the crucial computer chips, fuelled by a pandemic-driven surge in demand for home electronics.
The effects could already be felt in key market China, where VW said it had recently recorded declines.
“The risk of bottlenecks and disruption in the supply of semiconductor components has intensified throughout the industry,” VW said, adding that it was lowering its full-year deliveries forecast.
E-Offensive
It now expects deliveries to customers to be “noticeably up” on 2020, assuming the economic recovery from the pandemic stays on track.
VW had previously estimated that deliveries would be “significantly” higher.
Diess also noted that the group’s e-offensive was “picking up momentum”, with 171,000 all-electric vehicles delivered worldwide, a jump of 165% year-on-year.
The group, which is spending tens of billions of euros on the industry-wide shift towards ‘greener’ cars, has set its sights on become the world leader in electric vehicle sales.
VW expects battery-powered cars to make up half its sales by 2030, and “almost 100%” by 2040.
Also on AF: Volkswagen Eyeing Supercharged China EV Sales Surge
