VW Says Chip Shortage Will Continue Impacting New Car Sales In 2023

After enduring a difficult year in 2022, Volkswagen announced that 2023 would likely be just as challenging. Chip shortages and other supply chain disruptions, including production stoppages due to the war in Ukraine, are leading to persistent headwinds. 

Overall, Volkswagen ended 2022 on a strong note. Electric car sales grew by 23.6% to a worldwide total of 330,000, led by the ID 4 crossover, which accounted for roughly half of deliveries. However, 2022 sales still fell by 6.8 percent compared to 2021, dropping to a total of 4.56 million cars.        

In China, Volkswagen more than doubled its EV sales which increased to over 143,100 vehicles, including the ID 3 hatchback, the ID 4 crossover, and the Chinese market ID 6 SUV. It expects sales in that market to grow significantly in 2023 with the launch of the updated ID 3, a new ID 7 sedan, and the ID Buzz MPV. Other German automakers, including BMW and Mercedes-Benz, saw similar increases in Chinese market sales and expect the strong demand to continue in 2023. 

Similarly, sales of Volkswagen are up in the US as well. The company reported a third-quarter increase of 12 percent for all vehicles for a total of 88,820. Sales of the ID.4 hit a new sales record, increasing to 6,657 vehicles in the third quarter, up 10 percent over 2021. Overall, the company ended the quarter down 20 percent for the entire year.  

According to Imelda Labbe, Volkswagen AG's board member for sales and marketing, the automaker holds a "very high" order backlog due to "persistent supply chain shortages." Volkswagen expects those issues to subside in 2023, with production eventually stabilizing.

Last August, outgoing CEO Herbert Deiss signed a Memorandum of Understanding with the Government of Canada. The agreement is in connection to battery materials and technology, which Volkswagen expects will address shortages in those areas. 

Labbe also added, “The roadmap is clear. Volkswagen already has the broadest portfolio of electric models. By 2026, the brand will have the right product in every segment, from the entry-level e-car to the new flagship ID 7.”