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Audi CEO sees chip shortage as ‘perfect storm’ but will get through it

Markus Duesmann, board member of German luxurious carmaker BMW attends the firm’s yearly news convention in Munich, Germany, March 21, 2018. REUTERS/Michael Dalder

FRANKFURT, Oct 4 (Reuters) – High quality car model Audi, Volkswagen’s (VOWG_p.DE) most significant income contributor, has to troubleshoot on a day-to-working day foundation to deal with an ongoing shortage of auto chips, its chief government mentioned.

“We had a pretty powerful initially half in 2021. We do anticipate a a lot weaker next fifty percent. We actually have issues,” Markus Duesmann instructed Reuters in advance of the Reuters Occasions Automotive convention, calling the circumstance “a excellent storm”.

Duesmann’s feedback spotlight the issues world carmakers are experiencing in navigating a global chip source crunch that has strike vehicle output around the planet.

But whilst the motor vehicle industry’s vehicle gross sales have suffered it has softened the blow via price will increase that have boosted margins.

Audi in July claimed it had been unable to make a mid 5-digit range of vehicles in the very first half of the calendar year. But its revenue margin in the interval surged to 10.7%, even surpassing the 8% in 2019 prior to the pandemic struck. go through additional

“We are dealing with it quite very well I would say,” Duesmann, who also sits on the administration board of Volkswagen, explained. He mentioned the team was looking for closer ties with chipmakers and that the carmaker would arise more powerful from the crisis.

“But at the second it is a day-to-working day troubleshooting process,” he explained.

Audi, which accounted for a lot more than a quarter of Volkswagen’s very first-half running gain, has embarked on an ambitious change in the direction of battery-driven automobiles, meaning all new versions it will launch from 2026 will be completely electric powered.

Meantime, manufacturing of inside combustion engines will be little by little phased out up to 2033. Audi’s CFO in August stated it would only take 2-3 years in advance of profitability of electric powered autos (EV) would match that of combustion motor cars.

Duesmann thinks this could transpire even far more immediately.

“The point where by we get paid as considerably income with electrical automobiles as with combustion motor autos is now, or … upcoming year, 2023. They are really even now, the rates,” Duesmann mentioned.

Apart from initiatives to obstacle Tesla (TSLA.O) and turn out to be the major vendor of EVs, Volkswagen, the world’s No.2 carmaker, is also doubling down on endeavours to build software program, which CEO Herbert Diess stated is the industry’s authentic gamechanger. read additional

Duesmann, who took above as Audi CEO last year, has earlier mentioned that Volkswagen would make most of the automotive software program necessary for the group’s transformation on its personal and that it was too early to consider about partnerships. study additional

“Due to the fact at the second … it would get away pace, it would insert complexity,” Duesmann stated. “Definitely we could share our software program system with other automotive corporations but that is extra mid-expression, extensive-time period … 5-10 many years.”

Duesmann, a former BMW (BMWG.DE) govt, now also has responsibility for luxury manufacturers Lamborghini, Ducati and Bentley which have been introduced under the Audi roof.

The 52 calendar year-previous Ducati enthusiast brushed off recurring speculation that one particular of them could be sold, even though there was normal exterior curiosity.

“These makes … are really beneficial extremely financially rewarding makes, where by we can even broaden the synergy degree in the future,” Duesmann said. “There are no strategies whatsoever to get rid of them.”

Reporting by Christoph Steitz. Editing by Jane Merriman

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