William Malcolm

VW Lowers Outlook As Chip Shortage Hits Profit

In the third quarter, the German car group Volkswagen’s operating profit fell by 18.5 percent year on year to 2.6 billion euros (approximately 67 billion CZK). The company’s financial results were hit by a global shortage of chips, which led to production downtime. The company announced it today. At the same time, it worsened the estimate of year-round deliveries of cars to customers. It now assumes that deliveries will remain roughly at last year’s level, while previously it expected them to increase.

Excluding extraordinary items, operating profit fell 12 percent year-on-year to 2.8 billion euros in the third quarter. It thus fell short of the expectations of analysts, who, according to a survey by Refinitiv, estimated it at around three billion euros.

The Volkswagen Group delivered less than two million cars to customers in the third quarter, almost a quarter less than a year ago. In the first three quarters of this year, however, deliveries increased by about seven percent to almost seven million vehicles.

Volkswagen’s quarterly sales fell four percent year-on-year to almost 57 billion euros. However, the company still expects revenue growth from last year’s 223 billion euros throughout this year.

In the first three quarters of this year, sales increased by 20 percent to 186.6 billion euros. Operating profit rose to almost 14 billion euros from just 1.7 billion in the same period last year, when the company’s results were hit by the covidu-19 pandemic.

Škoda Auto is also part of the Volkswagen Group. According to today’s results report, it almost doubled its operating profit to 900 million euros (approximately 23 billion CZK) from 469 million euros a year ago in the period from January to September.