German automaker Volkswagen ((VWAGY)) said the demand for chips in cars remain high as supply chain constraints persist and will not improve until 2024.
Chief Financial Officer Arno Antlitz told German daily Boersen-Zeitung recently that there will not be enough semiconductor chips until 2024 because of the ongoing supply chain bottlenecks from the global pandemic.
While the supply chain constraints will improve toward the end of 2022 and the production of vehicles will reach 2019 levels in 2023, there is still not enough chips to cope with the increased demand.
"The structural undersupply will likely only resolve itself in 2024," Antlitz said.
Another issue arose as some Volkswagen production shifts were canceled because the company was not able to receive wire harnesses from Ukraine, he said.
Volkswagen is working to create new supplier relationships to find the wire harnesses from other countries.
The company's planned IPO of Porsche AG that is scheduled to occur at the end of 2022 will provide the automaker cashflow to pay for its software unit and battery production plans.
"Only those who can map out their battery supply chain have the advantage at scaling in electromobility. Securing the supply chain comes with that. A Porsche IPO could give us a lot more flexibility in financing this," Antlitz said.
BMW ( (BMWYY) ) said the shortage of chips is anticipated to last into 2023, CEO Oliver Zipse told newspaper Neue Zuercher Zeitung (NZZ) on April 11.
"We are still in the height of the chip shortage," Zipse said. "I expect us to start seeing improvements at the latest next year, but we will still have to deal with a fundamental shortage in 2023."
Volkswagen to Exit From Combustion Models
Volkswagen said it plans to exit several of its combustion engine models the end of the decade and sell less cars overall, Antlitz told the Financial Times. Instead, the automaker wants to focus on manufacutring additional profitable premium vehicles.
The strategy is to discontinue 60% of its gas- and diesel-powered models in Europe by 2030.
The company currently has at least 100 models from its various brands.
Volkswagen AG said the company was able to return to profitability in North and South America in 2021. The full-year group revenue in South America increased to 11.04 billion euros ($12.08 billion) from EUR8.63 billion and rose to EUR45.31 billion from EUR36.81 billion in North America.
The group operating profit for the period skyrocketed to EUR19.28 billion ($20.87 billion) from EUR9.68 billion ($10.48 billion).
