Despite being the VW Group’s biggest profit contributor, Audi has found itself having to troubleshoot on a day-to-day basis in order to tackle the ongoing global chip shortage, as per its chief executive, who understands that a lot of things had to go wrong for the situation to become what it is.
“We had a very strong first half in 2021. We do expect a much weaker second half. We really have trouble,” said Audi CEO Markus Duesmann in an interview with Reuters. He then goes on to call this situation a “perfect storm.”
He is however happy with the way his company has been dealing with the issue, adding that the VW Group, in general, is seeking closer ties with chipmakers as a solution, while emphasizing his belief that the German carmaker will emerge stronger from this crisis.
Right now though, “it’s a day-to-day troubleshooting process,” he said.
Despite lower sales, Audi managed to soften those blows through price increases. Back in July, the carmaker saw its profit margin surge to 10.7%, even surpassing the 8% in 2019 before the onset of the pandemic.
Audi, which accounted for more than a quarter of VW’s first-half operating profit, is also making the shift towards battery-powered vehicles, with all new models released from 2026 onwards to be fully electric.
This means that production of internal combustion engines will be slowly phased out sometime before 2033. Furthermore, the company’s CFO stated recently that it would only take 2-3 years before electric vehicles become just as profitable as internal combustion engine cars. Duesmann is even more optimistic.
“The point where we earn as much money with electric cars as with combustion engine cars is now, or next year, 2023. They are very even now, the prices.”
The thing is, EVs need chips just as much as ICE-powered cars do, if not more. Which is what makes this ongoing shortage so difficult to handle.
He is however happy with the way his company has been dealing with the issue, adding that the VW Group, in general, is seeking closer ties with chipmakers as a solution, while emphasizing his belief that the German carmaker will emerge stronger from this crisis.
Right now though, “it’s a day-to-day troubleshooting process,” he said.
Despite lower sales, Audi managed to soften those blows through price increases. Back in July, the carmaker saw its profit margin surge to 10.7%, even surpassing the 8% in 2019 before the onset of the pandemic.
Audi, which accounted for more than a quarter of VW’s first-half operating profit, is also making the shift towards battery-powered vehicles, with all new models released from 2026 onwards to be fully electric.
This means that production of internal combustion engines will be slowly phased out sometime before 2033. Furthermore, the company’s CFO stated recently that it would only take 2-3 years before electric vehicles become just as profitable as internal combustion engine cars. Duesmann is even more optimistic.
“The point where we earn as much money with electric cars as with combustion engine cars is now, or next year, 2023. They are very even now, the prices.”
The thing is, EVs need chips just as much as ICE-powered cars do, if not more. Which is what makes this ongoing shortage so difficult to handle.