Berlin – Volkswagen AG
, one of the world’s largest automakers, expects inflation to fall later this year, but has warned there will be little improvement in the global shortage of semiconductors that has caused many automakers to cut production as they try to find on chips.
The forecast comes as the auto industry ramps up production of electric vehicles that require raw materials and a range of semiconductors to control and connect the car’s platforms and infotainment components to the Internet. The shortage of computer chips has left many automakers unable to meet consumer demand for new cars, limiting their ability to grow and driving up prices for new and used cars.
Arno Antlitz, Volkswagen’s chief financial officer, told the Wall Street Journal on Monday that the company is well immune to inflation. Prices for many raw materials and parts needed by automakers have risen dramatically last year, as have auto prices.
Mr. Antlets said Volkswagen had mitigated the impact of higher prices for raw materials and components through aggressive cost cutting and that higher prices had not yet translated into higher wages for the company. He said he expects inflation to fall later this year, but added that the company will continue to struggle with a short supply of chips throughout the year.
“We don’t see much pressure on wages,” he said. Currently, the high inflation we see will be temporary. The ability to grow in 2022 will depend on the ability to get more chips. “
In response to rising costs and demand for new cars outstripping supply, automakers and dealers raised prices for new and used cars and offered lower discounts and cash incentives to attract buyers.
Mr. Antlitz said higher auto prices have boosted automakers’ profits and could be an advantage to stay even after chip shortages are over and inflation eases.
“Because of the car shortage in general, we have better margins and lower incentives [for customers]. Overall, we expect a good year for Volkswagen.”
Mr Antlitz, who became Volkswagen’s chief financial officer last year, said a structural shortfall in chip supply is likely to persist throughout the year, despite the company’s efforts to prioritize chips for its most profitable vehicles and develop direct relationships with chips. Manufacturers down the supply chain.
Some car manufacturers like Tesla company ,
They did better during the chip crunch. Tesla has adapted to the scarcity of semiconductors used by the auto industry by rewriting software to allow its cars to use more widely available chips.
“We can go back to the levels we saw in 2019 in 2023,” said Mr. Antlets. “We are making similar efforts as Tesla, but our model range is much higher and more complex.”
After initially anticipating a rebound in chip supply in 2021, many automakers have warned for months that a steady rise in chip demand from automakers, consumer electronics companies and other manufacturers is likely to extend chip pressure through 2022.
In the US, Volkswagen became profitable in 2021 for the first time in years, posting the strongest sales growth in nearly a decade.
Volkswagen is pushing to build its electric car business around the world, and the cars could present the company with an opportunity to grow in the US market, Mr. Antlitz said.
In general, the automaker is a niche competitor in the United States, but in the electric vehicle market, Volkswagen is growing faster and has captured a larger share of sales than it was able to do in the past with a conventional internal combustion engine, or snowmobile.And
“We have 7.5% of the market share for electric vehicles in the US, doubling our market share for ICE and second behind Tesla,” said Mr. Antlitz.
Volkswagen brands including Porsche and Audi are planning to launch eight new battery electric cars in the United States this year. The Volkswagen brand aims to have fully electric vehicles account for 50% of its vehicle sales in the United States by 2030, Mr. Antlitz said.
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