By Dominic Chopping
Volkswagen backed its full-year guidance but cautioned that meeting it will require an adequate supply of semiconductors, the latest sign that the auto industry is becoming increasingly concerned about a chip shortage.
The German automaker said Thursday that chip shortages haven't yet had an impact on output at its German factories, with vehicle production secured for the coming week.
However, it noted that the situation is dynamic.
"Short-term impacts on the production network of the Volkswagen Group cannot generally be ruled out," a spokesperson said.
The Dutch government recently seized control of Netherlands-based semiconductor company Nexperia from its Chinese owner, prompting Beijing to prohibit its chip exports from China. Nexperia makes basic transistors and chips that are used in products such as control units in vehicle electrical systems.
A trade group representing the auto sector in the European Union, The European Automobile Manufacturers' Association, warned yesterday of imminent assembly line stoppages as some of its members have already experienced a halt to part supplies.
Volkswagen said it is working to find additional suppliers as it reported a third-quarter operating loss, with earnings hit by issues at sports-car maker Porsche.
The company had previously warned that a decision by Porsche--of which is it a majority owner--to delay the rollout of electric vehicles while cutting earnings guidance would lead to a 5.1 billion-euro ($5.92 billion) hit to its own operating profit.
That news prompted Volkswagen to lower its financial expectations last month, guiding for a full-year operating return on sales of 2% to 3% and net cash flow in the automotive division of around zero. It reiterated those targets Thursday.
Sales this year are expected to be similar to last year's.
Negative price and mix effects, U.S. tariffs, and the Porsche costs resulted in charges of around 4.7 billion euros over the quarter.
"Tariffs and the resulting negative volume effects burden us by up to 5 billion euros on a full-year basis," Chief Financial Officer Arno Antlitz said. This relates to both direct tariff payments and the fact that fewer vehicles will be sold because of the levies.
"Meanwhile, in China, all our brands are having a hard time. We see that there is a limit to growth. And now all these factors have to be compensated for."
In China, manufacturers face intense competition as rivals cut prices to win customers, and Volkswagen recently reported a 7.2% drop in vehicle deliveries in the country.
The carmaker reported a third-quarter operating loss of 1.3 billion euros from a profit of 2.83 billion euros, as revenue rose 2.3% to 80.31 billion euros.
A FactSet analyst poll had expected an operating loss of 578 million euros on revenue of 79.39 billion euros.
Write to Dominic Chopping at dominic.chopping@wsj.com
(END) Dow Jones Newswires
October 30, 2025 05:31 ET (09:31 GMT)
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