Chip shortage continues to wreak havoc on VW and Stellantis
The underbody of an ID.3 electric vehicle is assembled at a Volkswagen facility in Dresden, Germany, on January 29, 2021.
Matthias Rietschel | picture alliance | Getty Images
LONDON — The global chip shortage is continuing to wreak havoc on the automotive sector, with several of the world’s biggest carmakers blaming the crisis for disappointing financial results this week.
Volkswagen and Stellantis said Thursday that the ongoing semiconductor shortage remains a major problem for them.
“It was a challenging quarter,” VW CEO Herbert Diess told CNBC’s “Squawk Box Europe” Thursday.
“Our volume brands suffered most because of semiconductor supply,” Diess said, referring to Seat, Skoda and Volkswagen.
In comparison, Porsche and Audi (Volkswagen’s premium brands) have been “quite resilient,” Diess said, adding that they’ve delivered positive results.
With no end in sight, the semiconductor chip shortage is now expected to cost the global automotive industry $210 billion in revenue in 2021, according to consulting firm AlixPartners.
From a geographic perspective, Diess confirmed that VW’s China business has been disproportionately affected.
“China really suffered,” he said, adding that VW lost market share in the country.
The group prioritized its premium brands in China and “compromised” on volume sales, Diess said, adding that the VW brand “suffered a lot.”
The German carmaker cut its outlook for deliveries, toned down sales expectations and warned of cost cuts as it reported lower-than-expected operating profit for the quarter.
Not all bad?
But Diess claimed that it’s not all negative. “The demand side is really good,” he said. “We have filled order books in all areas and our EV [electric vehicle] sales are coming along well.”
“We had to reduce our sales outlook but revenue outlook is still positive and [it has been] significantly growing over the last year,” Diess said. “That means we can keep our margin guidance, which is very important.”
Diess is optimistic that semiconductor supply will pick up in the next quarter, but he still expects to see some supply constraints in 2022.
“We foresee that semiconductors will be bottlenecks in our supply chain,” he said. “There might be others as well, but mostly we will see semiconductor constraints.”
Elsewhere, Stellantis — formed through the merger of Fiat Chrysler and France’s PSA — has also been hurt by the chip shortage.
Like VW, it also missed analyst expectations when it reported its third-quarter results Thursday. It reported a 14% fall in third-quarter revenue on a pro-forma basis after semiconductor shortages cut planned quarterly production by 30%, or 600,000 vehicles.
“The level of chip shortage was probably slightly higher than what we had expected when we last spoke to the market in August,” Chief Financial Officer Richard Palmer said, adding that the full-year total of lost production due to the chip shortage would top a previous forecast of 1.4 million units.
But Palmer said the business has seen a…
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