Semiconductor crisis wipes €500m off Volkswagen profits

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92 shares, 153 points

The semiconductor crisis wiped almost €500m off Volkswagen’s pre-tax profits in the last quarter, as the German group struggled to produce enough cars to meet resurgent demand.

The world’s second-largest carmaker by volume said profits fell by almost 15 per cent in the three months to the end of September, to almost €3.1bn, compared with just over €3.6bn during the same period in 2019. It also warned that it would sell as few cars in 2021 as it did during the height of the pandemic last year. The group delivered just over 9.3m vehicles in 2020.

Semiconductor bottlenecks pushed down global car production by 18 per cent in the last quarter, when compared with the same period last year, according to UBS. But some of VW’s rivals have beaten Wall Street’s expectations anyway, with GM reporting on Wednesday that it would reach the “high end” of its earnings guidance for 2021.

“The results of the third quarter show once again that we must now systematically drive forward the improvement in productivity in the volume sector,” said Volkswagen’s chief executive Herbert Diess.

Thursday’s results come amid renewed clashes between Diess and Volkswagen’s powerful works council, which represents the majority of its 292,000-strong German workforce.

On Wednesday, the council accused the executive of being unwilling to engage with employees facing an uncertain future, and of scheduling a meeting with US investors rather than turning up to a union appointment.

“This behaviour is unprecedented in the history of our company and shows once again that even in this crisis the chief executive has neither empathy nor sensitivity for the situation of the workforce,” said Daniela Cavallo, who took over as the council’s lead representative earlier this year.

Late on Wednesday, Diess decided to cancel his other appointments and committed to meeting the works council, a person close the executive said.

Source: Financial Times


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92 shares, 153 points

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