A Volkswagen ID.5 electric car (a SUV coupé model) is on view at the show room of German car maker Volkswagen (VW) at the 'Glassy Manufactory' (Glaeserne Manufaktur) production site in Dresden, eastern Germany, on November 3, 2021. Volkswagen unveils the ID.5, its first electric SUV coupé.
(Photo : JENS SCHLUETER/AFP via Getty Images)
The year 2021 was a rough year for Volkswagen Group, with the automaker posting its lowest sales figures in a decade. On Wednesday, January 12, Volkswagen announced that only 8.9 million deliveries were made last year. Volkswagen had trouble adapting to supply chain shortages, leading to the disappointing figures.
Supply chain shortages cripple Volkswagen's sales
Volkswagen's sales dropped 8.1 percent, with just under 4.9 million units sold. Sales and marketing chief Klaus Zellmer tried to put a positive spin on Volkswagen's 2021 figures, saying that the company still reached a satisfying sales result under unusually challenging circumstances. Zellmer admitted, though, that the huge effects of chips on production were not fully compensated by Volkswagen.
Stephan Wöllenstein echoed those sentiments with the CEO of Volkswagen Group China, calling 2021 one of their most challenging years since they entered the Chinese market. Wöllenstein said that the chip supply shortage prevented the company from meeting the Chinese customers' demands.
According to a report by the China Business Journal, Volkswagen only recorded 3.3 million deliveries in Hong Kong and the Chinese mainland in 2021, a huge 14.1 percent drop compared to the previous year. Still, there was some good news for Volkswagen in China, with sales of their new energy vehicles increasing by 128 percent compared to 2020, with almost 119,000 units sold.
Wöllenstein told a briefing in Beijing that Volkswagen aims to double electric car sales in China in 2022. The year has not started well for Volkswagen, though, in terms of its Chinese prospects, with the COVID-19 pandemic wreaking havoc on the German automaker's production lines once again.
Related Article: BMW Beats Mercedes in Premium Segment as Sales Grow 9.1% In 2021 With 2.213 Million Units Sold
Volkswagen shuts down plants in China after COVID-19 outbreaks
Volkswagen's car plant in Tianjin, a port city in the northern part of China, was recently shut down after domestic transmission of the Omicron variant was detected in the area in recent days. Volkswagen operates the Tianjin plant alongside state-run FAW Group Corp.
In December, Volkswagen was also forced to shut down one of its car plants in Ningbo, a port city in the eastern part of China. A small COVID-19 outbreak was detected in the area, forcing the closure of the plant that Volkswagen operates alongside state-run SAIC Motor Corp.
What makes the situation difficult for Volkswagen is that China is still implementing a zero-COVID strategy in the country. The emergence of the highly contagious Omicron variant has made this strategy so challenging to adopt in China.
Wöllenstein commented on the problems brought by the deadly coronavirus, saying that "it is really a complex system of constraints which is changing more or less on a weekly basis." Wöllenstein remained confident with the work being done by Chinese authorities, saying they have brought local outbreaks under control in just a few weeks, which have allowed businesses such as Volkswagen to return to operations.
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