Volkswagen: Bad news from China

The German car manufacturer Volkswagen is not having an easy time of it at the moment. The uncertainty surrounding board member Herbert Diess has recently sent the paper downhill. As a result, the chart image has deteriorated further. Now bad news from China is causing trouble.

The VW -Group misses its sales targets for the important ID electric models in China this year. Actually, Volkswagen had Targeted sales of 80,000 to 100,000 cars in the fully electric vehicle series in the People’s Republic, now it should only be between 70,000 and 80,000 cars. A spokesman for the company confirmed statements by CEO Herbert Diess on Friday in an employee questionnaire at the end of November. In the coming year, sales will then be doubled to 160,000 cars.

Reason for the missed goals

According to the spokesman, the reason is the semiconductor shortage, which has been affecting VW in China for several months. In addition to lucrative premium models from Porsche and Audi, the company had previously also preferred the electric models for chip assembly. Investors are paying close attention to the ramp-up of the ID series because they are concerned about strong electric competition for VW in China. The shortage of semiconductors is now also having an impact in the electrical segment, it was said. This also has an impact on the entire market. According to preliminary data from the CAAM manufacturers’ association, 2.47 million cars and commercial vehicles were sold in China in November, 10.8 percent less than a year ago.

The VW preferred share was in the afternoon with the market 0.5 percent in the red. The paper had already given way in the past few months because the group had been having problems with the chip supply for its production in China for months. China is the largest single market for the Volkswagen Group, where the company is the market leader with its joint ventures. In addition, the People’s Republic is regarded as the lead market for electromobility in view of the strict requirements for car emissions in the smog-ridden megacities of the country.

The spokesman rejected media reports that China boss Stephan Wöllenstein would soon be recalled because of the problems. Wöllenstein has been with VW in China for around ten years; since 2019, he has headed Volkswagen Group China, in which Volkswagen’s shares in various joint ventures in the country are bundled. After such a long time in the People’s Republic, a move back to Germany in a different position would not be unusual. As a contender for the post, VW brand finance director Alexander Seitz is considered.