Audi CEO sees chip scarcity as ‘the right storm’, however will get by way of

Audi mentioned in July that it was unable to fabricate mid-five-digit automobiles within the first half of the 12 months.

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Duismann’s feedback spotlight the issues carmakers are going through in navigating the worldwide chip provide disaster

Premium automotive model Audi, Volkswagen’s greatest revenue contributor, has to troubleshoot on a day-to-day foundation to take care of the continuing scarcity of auto chips, its chief government mentioned.

“We had a very strong first half in 2021. We expect a very weak second half. We really have trouble,” Marcus Duesmann instructed Reuters forward of the Reuters Events automotive convention, calling the scenario “a perfect storm”.

Duismann’s feedback spotlight the issues that international carmakers are going through in coping with the worldwide chip provide disaster that has affected automotive manufacturing all over the world.

But whereas the automotive trade’s automobile gross sales have been impacted, the setback has been mitigated by worth hikes, resulting in increased margins.

Audi mentioned in July that it was unable to fabricate mid-five-digit automobiles within the first half of the 12 months. But its revenue margin rose to 10.7% on this interval, even surpassing 8% in 2019 earlier than the pandemic struck.

“We are dealing with it very well, I would say,” mentioned Duesmann, who additionally sits on Volkswagen’s administration board. He mentioned the group was in search of nearer ties with chip makers and that the carmaker would emerge stronger from the disaster.

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

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

Audi, which accounts for greater than 1 / 4 of Volkswagen’s first-half working revenue, has launched into an bold shift towards battery-powered autos, that means all new fashions to be launched from 2026 shall be totally powered. Will be electrical.

Meanwhile, manufacturing of inner combustion engines shall be phased out progressively by 2033. Audi’s CFO in August mentioned it will take solely 2-3 years for the profitability of electrical autos (EVs) to match that of combustion engine automobiles.

Duesman thinks it may occur even sooner.

“The point where we make as much money with combustion engine cars as with electric cars is now, or … next year, 2023. Those are still very, very prices,” Duesman mentioned.

In addition to attempting to problem Tesla and develop 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 has known as the trade’s true gamechanger.

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

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

The former BMW government Duismann now additionally holds the accountability of 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 is perhaps bought, though there was common exterior curiosity.

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

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