SAWT BEIRUT INTERNATIONAL

| 5 August 2021, Thursday |

Volkswagen China sees chip supply shortage easing

The Leading Foreign Manufacturer in China, the world’s largest automobile market, Volkswagen AG, indicated on Friday that chip supply could increase in the next six months.

Due to shortages, automakers all around the world have had to change assembly lines as a result of manufacturing delays blamed by certain semiconductor companies on a faster-than-expected recovery from the coronavirus epidemic.

“We expect to see an improvement in this position within the second half of the year,” Volkswagen’s China boss, Stephan Woellenstein, told reporters.

Starting in August, Volkswagen will source some chips from a new supplier, Woellenstein said, adding that the move would start to ease the shortage in September.

Because of the chip shortage, Volkswagen, which has partnerships with FAW Group and SAIC Motor, saw its sales drop 12.3% between April and June compared with a year earlier. Volkswagen’s rival General Motors Co said its China sales in the second quarter grew 5%.

Premium brands including Audi and Porsche are growing, Woellenstein said. Audi sales in the first half this year in China grew 39% compared with the same period last year while Porsche increased 23%.

Woellenstein also said sales of VW’s electric ID.4 cars hit 2,900 units in June, up from around 1,500 cars in May. Reuters reported last month that the ID series – the backbone of its electric vehicle ambitions – is off to what even company sources call a worryingly slow start in China