Minus 14 percent: lack of chips causes VW sales to collapse in China

The Volkswagen Group’s sales in the world’s largest car market, China, fell by 14 percent last year. VW-China boss Stephan Wllenstein cited the lack of semiconductors and problems in the supply chains as reasons in front of journalists in Beijing on Tuesday. “It’s been a pretty difficult year.” This year, Volkswagen wants to at least make up for the losses – and also take off with its electric cars from the ID family.

The decline in 2021 mainly affected the volume brands Volkswagen and Skoda, reported Wllenstein. The premium brand Audi did less badly with a minus of 3.6 percent compared to the previous year. Porsche was able to sell eight percent and Bentley even 43 percent more cars. The overall market had grown by four percent. The VW Group’s market share in China, which had long been 14 or 15 percent, fell to eleven percent.

Chip shortage and Corona

“600,000 cars have been lost in production,” said Wllenstein, referring to bottlenecks that would have hindered sales. He mentioned the semiconductor shortage, corona outbreaks and subsequent production stops, as well as a fire at a Japanese supplier. “It’s a complex system of restrictions that really changes weekly,” said Wllenstein.

This year, the group wants to catch up vigorously, as Wllenstein said. “The demand is still there.” While the overall market is expected to grow by four percent, Volkswagen wants to grow by 15 or 16 percent. “We want to regain disproportionately what we have lost above average in the past year,” said the VW China boss.

E-car sales are expected to double

Sales of electric cars from Volkswagen’s ID family are also expected to develop positively. After missing the target of 80,000 to 100,000 for 2021 and actually selling “a little more than 70,000”, Wllenstein wants to “at least” double sales this year. He was certain that Volkswagen would sell every ID car that could be built. The supply of semiconductors for 160,000 to 200,000 ID cars is assured.

With the transformation to alternative drives, half of the new models that will be launched in China this year will be electric cars. Domestic Chinese manufacturers are particularly strong here, which, from Wllenstein’s point of view, will hardly change. By the end of the decade, however, Volkswagen wants to be number one in China also in e-mobility.

“Great purchasing power in society”

In his opinion, the prospects for VW’s largest single market are “very positive”. With the growing middle class in China, annual car sales of 28 to 30 million are expected by the end of the decade. “There is great purchasing power in society,” said Wllenstein. “It is us, the industry, that cannot deliver.” Last year, 21 million cars were sold in China.

There are still factors of uncertainty. “The semiconductor risks are difficult to assess.” Wllenstein was also concerned about the first omicron outbreak in China in Beijing’s neighboring city of Tianjin and possible further lockdowns. The Volkswagen plant in Tianjin has already had to temporarily stop production. Often curfews or production stops come overnight, so that supply chains have to be adjusted. But they also passed quickly. “It could be a number of minor problems, though.”

Because of the strict entry restrictions and the compulsory quarantine of three weeks in China, it is also difficult to bring foreign specialists into the country. “A minimum of international experts is still necessary and wanted,” said Wllenstein. But it is difficult to motivate skilled workers to go to China – especially if they also have children. “The industry suffers.” (dpa / swi)

Also read:

Experts expect a good six percent increase in sales: China’s auto industry will grow again in 2022

Despite a weak fourth quarter: VW will increase US sales significantly in 2021

Jrgen Unser succeeds Werner Eichhorn: Audi is changing its China boss

From the data center:

Survey on the China sales of German car manufacturers

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Lenny Li

I started to play with tech since middle school. Smart phones, laptops and gadgets are all about my life. Besides, I am also a big fan of Star War. May the force be with you!

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