# Volkswagen sticks to outlook as size offset supply chain woes
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-05-04
Category: BUSINESS
Category URL: https://financedigest.com/category/business
Meta Title: Volkswagen sticks to 2022 outlook despite supply chain
Meta Description: Volkswagen sticks to its 2022 outlook despite supply chain challenges, leveraging its global production network to balance production and mitigate component
URL: https://financedigest.com/volkswagen-sticks-to-outlook-as-size-offset-supply-chain-woeshtml

By Christoph Steitz and Jan Schwartz

FRANKFURT (Reuters) -Volkswagen, Europe’s top carmaker, on Wednesday stuck to its outlook for 2022, shrugging off supply chain disruptions caused by the war in Ukraine and the pandemic by drawing on its global production network.

Global carmakers, like most industrial sectors, face a scarcity of key components in the wake of COVID-related lockdowns and Russia’s invasion of Ukraine, compounding an ongoing shortage of semiconductors.

We used our position as a truly global company to balance production across our markets and relieve pressure where there were [supply issues](https://www.financedigest.com/uks-j-d-wetherspoon-returns-to-profit-as-supply-issues-ease.html "UK’s J D Wetherspoon returns to profit as supply issues ease") and product shortages,” CEO Herbert Diess told journalists.

For example when we had to cut [back production](https://www.financedigest.com/5-ways-to-sustain-productivity-when-the-clocks-go-back.html "5 ways to sustain productivity when the clocks go back") in Europe due to a lack of wiring harnesses and in some areas had to shut down plants, we sent the semiconductors we didn’t need to other regions.

Volkswagen said it continued to expect sales to rise 8%-13%, an operating [profit margin of 7.0%-8.5% and an increase](https://www.financedigest.com/4-tips-for-landlords-to-increase-rental-property-profits.html "4 Tips for Landlords to Increase Rental Property Profits") in deliveries of 5-10% in 2022, pointing to its global set-up that allowed it to prioritise regions and high-margin products.

For the [top line](https://www.financedigest.com/vodafone-takes-first-steps-in-turnaround-with-top-line-improvement.html "Vodafone takes ‘first steps’ in turnaround with top-line improvement") in particular, this is a positive surprise,” Stifel analysts wrote.

Diess still pointed to uncertainty from the [conflict in Ukraine](https://www.financedigest.com/gorbachev-died-shocked-and-bewildered-by-ukraine-conflict-interpreter.html "Gorbachev died shocked and bewildered by Ukraine conflict – interpreter") and the pandemic, adding the company could currently not foresee the full impact a deterioration of the situation would have, including a possible ban on Russian energy imports.

Volkswagen, which confirmed plans to list luxury division Porsche AG in a partial initial public offering in the fourth quarter, said it still expected [chip supply to improve](https://www.financedigest.com/nvidia-shows-new-research-on-using-ai-to-improve-chip-designs.html "Nvidia shows new research on using AI to improve chip designs") in the second half of the year.

The company, which reported preliminary results for the first quarter last month, reported [sales of 62.7 billion](https://www.financedigest.com/allianz-puts-n26-stake-up-for-sale-at-3-billion-valuation-ft.html "Allianz puts N26 stake up for sale at  billion valuation – FT") euros ($66 billion) for the first three months of the year, up 0.6% year on year.

($1 = 0.9498 euros)

(Reporting by Christoph Steitz; editing by Paul Carrel and Jason Neely)


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