Volkswagen (VW) AG is betting demand for electric vehicles (EVs) and easing supply constraints would help it return to growth in China this year, after the global chip shortage dented sales last year.
Deliveries fell to 3.3 million vehicles last year, down 14 percent from 2020 when the first wave of COVID-19 swept through the nation, VW China chief executive officer Stephan Wollenstein told reporters in Beijing yesterday.
That missed the group’s internal target, Wollenstein said.
Photo: Bloomberg
The VW brand accounted for about 2.26 million deliveries, or about 11 percent of the national auto market. That compares with a previous share of 14 percent to 15 percent, which Wollenstein described as a “substantial loss.”
The German automaker’s underperformance in one of its key markets illustrates how global automakers have been hit by the semiconductor shortage that started in late 2020, as well as COVID-19 outbreaks that have prompted swift lockdowns in China.
“If you talk to our logistic and production colleagues, it’s probably the hardest time in their business life,” Wollenstein said.
“We have to adjust our production programs more or less weekly, depending on what we are getting as supplies on a global basis, and what difficulties we have to deal with on a local basis,” he said.
COVID-19 outbreaks in the cities of Ningbo and Tianjin have caused shutdowns at Volkswagen’s joint-venture plant and key suppliers, which affected production of the ID series of electric vehicles. The company has delivered 70,625 IDs since its launch in March last year, missing the original target of 80,000 to 100,000.
For this year, the group is targeting a return to 2020 levels, which would add 500,000 to 600,000 units to sales, Wollenstein said.
The company is confident of doubling sales of the ID series, to about 140,000, he said.
In comparison, local electric vehicle makers Nio Inc (蔚來汽車), Xpeng Inc (小鵬汽車) and Li Auto Inc (理想汽車) delivered between 90,000 and 100,000 vehicles last year.
While China has lifted restrictions on foreign automaker’s shareholding in local joint ventures, Wollenstein said the move “effectively will not mean a lot” given the costs and willingness to change current partnerships.
VW has a 40 percent stake in a venture with China FAW Group (中國一汽集團) and a 50-50 venture with SAIC Motor Corp (上海汽車).
Despite some friction, the partnerships are “overall very beneficial” and “there is no reason for us to turn away,” he said.
Wollenstein is to step down by the end of August after serving more than 10 years in China. He is to be replaced by Volkswagen Brand chief executive officer Ralf Brandstaetter, the company said last month.
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