Frankfurt — Volkswagen’s biggest contributor to luxury car brand Audi needs to be troubleshooted on a daily basis to address the ongoing shortage of car chips, its CEO said. Told.
“The first half of 2021 was very good. We expect it to be much weaker in the second half. There is a real problem,” Markus Duesmann told Reuters before the Reuters event Automotive Conference, “the worst situation.” I called it.
Duesmann’s comments highlight the challenges faced by automakers around the world in overcoming the global chip supply crisis that is hitting car production around the world.
However, car sales in the automotive industry are struggling, which has eased the impact of price increases that pushed margins up.
Audi said in July that it couldn’t build a mid-five-digit car in the first half of this year. However, profit margins surged to 10.7% during this period, exceeding 8% in 2019, before the pandemic.
“I think we’re doing it pretty well,” said Duesmann, who also belongs to Volkswagen’s board of directors. He said the group is looking for closer relationships with chip makers, and automakers will be stronger out of the crisis.
“But at this point, it’s a routine troubleshooting process,” he said.
Audi, which accounts for more than a quarter of Volkswagen’s operating profit in the first half of the year, has embarked on an ambitious shift to battery-powered vehicles. This means that all new models released from 2026 will be completely electric vehicles.
Meanwhile, production of internal combustion engines will be phased out until 2033. In August, Audi’s CFO said it would only take a couple of years for the profitability of electric vehicles (EVs) to match the profitability of combustion engine vehicles.
Duesmann believes this can happen even faster.
“The point at which we make as much money in electric cars as in combustion engine cars is now, or … next year, 2023. They are still very cheap,” said Duesmann.
Apart from trying to challenge Tesla and become the number one EV seller, Volkswagen, the world’s second-largest carmaker, has also doubled its software development efforts.
Duesmann, who became CEO of Audi last year, said earlier that it is too early to think about Volkswagen’s own use of most of the automotive software needed to transform the group, and partnerships.
“At this point … it’s slowing down, which adds complexity,” says Duesmann. “Sure, you can share the software platform with other car companies, but it’s more medium-term, long-term … 5-10 years.”
Former BMW executive Duesmann is now also responsible for the luxury brands Lamborghini, Ducati and Bentley brought under the roof of Audi.
The 52-year-old Ducati enthusiast dispelled recurring speculation that one of them could be sold, even with regular outside interest.
“These brands are… very valuable and highly profitable brands that can even increase the level of synergies in the future,” says Duesmann. “I have no plans to get rid of them.”