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Audi CEO Sees Chip Shortage As ‘Perfect Storm’ But Will Get Through It


Audi in July mentioned it had been unable to construct a mid five-digit variety of automobiles within the first half of the 12 months.


Duesmann's comments highlight the problems carmakers are facing in navigating a global chip supply crunch

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Duesmann’s feedback spotlight the issues carmakers are going through in navigating a worldwide chip provide crunch

Premium automotive model Audi, Volkswagen’s greatest revenue contributor, has to troubleshoot on a day-to-day foundation to sort out an ongoing scarcity of auto chips, its chief govt mentioned.

“We had a very strong first half in 2021. We do expect a much weaker second half. We really have trouble,” Markus Duesmann instructed Reuters forward of the Reuters Events Automotive convention, calling the scenario “a perfect storm”.

Duesmann’s feedback spotlight the issues international carmakers are going through in navigating a worldwide chip provide crunch that has hit automotive manufacturing around the globe.

But whereas the automotive trade’s automobile gross sales have suffered it has softened the blow by way of value will increase which have boosted margins.

Audi in July mentioned it had been unable to construct a mid five-digit variety of automobiles within the first half of the 12 months. But its revenue margin within the interval surged to 10.7%, even surpassing the 8% in 2019 earlier than the pandemic struck.

“We are dealing with it pretty well I would say,” Duesmann, who additionally sits on the administration board of Volkswagen, mentioned. He mentioned the group was searching for nearer ties with chipmakers and that the carmaker would emerge stronger from the disaster.

“But at the moment it’s a day-to-day troubleshooting process,” he mentioned.

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Audi’s CFO in August mentioned it might solely take 2-3 years earlier than profitability of EV would match that of combustion engine automobiles.

Audi, which accounted for greater than 1 / 4 of Volkswagen’s first-half working revenue, has launched into an bold shift in direction of battery-powered autos, which means all new fashions it would launch from 2026 will probably be absolutely electrical.

Meantime, manufacturing of inner combustion engines will probably be progressively phased out as much as 2033. Audi’s CFO in August mentioned it might solely take 2-3 years earlier than profitability of electrical autos (EV) would match that of combustion engine automobiles.

Duesmann thinks this might occur much more rapidly.

“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,” Duesmann mentioned.

Apart from efforts to problem Tesla and change into the most important vendor of EVs, Volkswagen, the world’s No.2 carmaker, can be doubling down on efforts to develop software program, which CEO Herbert Diess mentioned is the trade’s actual gamechanger.

Duesmann, who took over as Audi CEO final 12 months, has beforehand mentioned that Volkswagen would make many of the automotive software program wanted for the group’s transformation by itself and that it was too early to consider partnerships.

“Because at the moment … it would take away speed, it would add complexity,” Duesmann mentioned. “Certainly we could share our software platform with other automotive companies but that’s more mid-term, long-term … 5-10 years.”

Duesmann, a former BMW govt, now additionally has duty for luxurious manufacturers Lamborghini, Ducati and Bentley which have been introduced beneath the Audi roof.

The 52 year-old Ducati fanatic dismissed recurring hypothesis that one in all them may very well be bought, although there was common exterior curiosity.

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“These brands … are very valuable very profitable brands, where we can even expand the synergy level in the future,” Duesmann mentioned. “There are no plans whatsoever to get rid of them.”

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