Volkswagen sales decline than expected due to supply chain issues

Volkswagen sales decline than expected due to supply chain issues

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Due to a semiconductor shortage, Volkswagen sold 2 million fewer cars than expected last year, the company said Tuesday, warning that persistent supply bottlenecks, rising commodity prices, and the Russia-Ukraine conflict could stymie growth in 2022.

Further sanctions on Russia could have a negative impact on the Volkswagen Group, a manufacturing facility in Kaluga, as well as sales and finance operations in the nation.

In 2021, the automaker reported increased revenue in all main areas. In Ukraine, it has no subsidiaries or equity investments.

Nonetheless, the group’s economic interests in Russia and Ukraine remained minor.

Even as it warned of persistent supply chain issues, it aims to improve deliveries by 5-10% and grow revenues by 8-13% in 2021.

Due to COVID-related lockdowns, Volkswagen and Toyota have temporarily halted production at some plants in China, with Toyota warning that the halt might endure until the end of the month.

Raw commodities and supply chains are already being impacted by the conflict in Ukraine.

The full impact of the crisis in Ukraine, according to Volkswagen (VOWG p) CEO Herbert Diess, is still unknown, casting doubt on the German automaker’s 2022 prognosis.

The corporation is expanding its wire harness production capacity for Europe and outsourcing car production to China and the United States. Inc (AMZN) said talks to resolve a contentious dispute over Future Retail outlets had failed and accused the company of deceptive advertising in Indian newspapers.

As the world’s second-largest fashion company tries to build on its recovery from the COVID-19 pandemic, H&M announced a 23 percent increase in first-quarter sales on Tuesday, which was in line with market forecasts.

H&M temporarily closed its stores in Russia earlier this month, which accounted for 4% of the company’s revenues in the previous quarter.

UniCredit, an Italian bank, is conducting an immediate evaluation of its Russian operations and may opt to exit the country following Russia’s invasion of Ukraine.

As a result of a new round of EU penalties, European stock markets opened down on Tuesday.

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