Volkswagen operating profit falls 12% in Q3 due to shortage of semiconductors

The German automotive giant Volkswagen announced on Thursday a 12% year-on-year drop in its operating profit in the third quarter, due to the shortage of semiconductors, which amputated the volume of deliveries by 600,000 vehicles.

“In the third quarter we lost about 600,000 vehicles that could not be delivered to customers (…)”, explained its president Herbert Diess in conference call.

“The worst must have already passed,” he added, after several months of the global crisis in component shortage.

The group’s operating profit fell 12% to 2,798 million euros (3,250 million dollars) precisely due to the global shortage of semiconductors.

Supply problems for these components even dragged a key subsidiary of the group, which includes its flagship car brand Volkswagen, to losses.

“The global lack of semiconductors has particularly influenced the third quarter,” the group explained in a statement, which had to close several factories temporarily due to a shortage of microchips.

Vehicle sales fell 24% compared to the third quarter of 2020, which had already been bad due to the effects of the pandemic, and the group decided to reduce its forecasts for 2021.

The Chinese market was “particularly affected” by component shortages and high customer demand “could not be met,” they said in a statement.

The number of vehicles sold will be within last year’s figures, even though VW expected a “significant” increase.

However, Volkswagen did not lower its profitability forecast, betting on a margin of between 6.0% and 7.5 percent. This figure is very followed by analysts and fell to 4.9% between July and September.

Turnover should also set “clearly” above 2020, helped as in the last quarter by sales of more profitable premium models.

“The results of the third quarter show that we have to make decisive progress in improving productivity” in the sector that includes, for example, brands VW, Seat and SkodaPresident Herbert Diess said in a statement.

Despite its poor operating performance, the group posted a slightly higher net profit of 5.6% in the third quarter, to 2.9 billion euros.

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