The massive supply problems with chips led to considerable production problems in the European automotive industry in the third quarter.

After the sharp drop in sales and profits, Volkswagen wants to push costs down harder and, according to CEO Herbert Diess, is even considering further job cuts.

Due to the dramatic situation and conflicts with the traditionally strong unions at Volkswagen, the company is even postponing its decision, planned for November 12, on investing more billions and occupying its plants by one month to December 9.

Carsten Germis

Business correspondent in Hamburg.

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Niklas Záboji

Business correspondent in Paris

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"We have to increase productivity in order to remain competitive," said Diess when the quarterly figures were announced on Thursday in a conference call with journalists.

The supply bottlenecks for electronic components have shown that the group is not resistant enough to fluctuations in capacity, added VW CFO Arno Antlitz.

"This clearly shows that we must continue to work resolutely on our cost structures and productivity in all areas."

Sales slump at Stellantis

In the case of Volkswagen, the lack of chips clearly brought to light the weak returns, especially for the core brand VW. Opel’s parent company Stellantis is also troubled by the lack of chips, which is slowing down production. At Stellantis, sales of cars in the third quarter fell by 27 percent compared to the previous year. Around 600,000 cars could not have been built in the quarter because of the semiconductor shortage alone, the company said. For the year as a whole, the group is sticking to its target of a return on sales of around 10 percent - provided that the shortage of materials does not worsen and there are no further corona lockdowns in Europe despite the increasing number of infections. “The trend is positive.We're seeing supply stabilize and production improving month-on-month, ”said Stellantis financial suburb Richard Palmer.

For Volkswagen, the lack of chips is particularly evident in volume brands such as VW, Skoda and Seat. These brands all posted operating losses in the third quarter. The Group's operating return fell to 4.9 percent - and only because premium brands such as Porsche, Bentley and Audi continued to generate good returns despite the crisis. Primarily due to the sale of high-margin premium vehicles, Volkswagen's sales in the first few months increased by 20 percent year-on-year to 186.6 billion euros. This also has to do with the fact that supplying high-yield premium brands such as Porsche or Audi with chips was a priority in the group. Volkswagen lowered its sales and revenue expectations for the current year due to the supply problems, but confirmed the return target of 6 to 7.5 percent.Compared to the same period last year, around 800,000 fewer cars were produced in the first nine months, it was said with a view to the lack of chips - the order books were full. In the third quarter, operating profit before special items fell 12 percent to 2.8 billion euros.