Chip shortage to hit 2023 sales, warns Volkswagen

The Volkswagen ID 4 was the brand's best-selling EV in 2022

German giant’s sales fell by almost 7% in 2022 as limited semiconductor supplies hit volumes

Volkswagen has warned that 2023 will be a “volatile and challenging year” for car sales, due to the ongoing effects of the chip shortage, which restricted its sales during 2022.

Overall, the German brand sold 4.56 million cars in 2022, a 6.8% shortfall compared with the previous year.

This was due to “persistent supply shortages”, said Imelda Labbé, board member for sales, marketing and aftersales.

Volkswagen currently holds a “very high” order backlog, it said in a statement.

Nonetheless, its electric car sales grew by 23.6% year on year to 330,000. This growth was championed by the ID 4 crossover, which recorded 170,000 global deliveries during 2022. It was also the best-selling car in Sweden for the second year in a row, with 8900 deliveries.

This surge in EV uptake also aligned with the sales performances of BMW and Mercedes-Benz. 

Volkswagen more than doubled its EV sales in China, handing over 143,100 examples of the ID 3 hatchback, the ID 4 and the ID 6 SUV, which is exclusive to the Chinese market.

Despite the threat of supply shortages, Volkswagen’s EV sales are likely to grow significantly in 2023 with the launch of the heavily updated ID 3, new ID 7 saloon and ID Buzz MPV.

Labbé added: “The roadmap is clear: with the Accelerate strategy, Volkswagen is stepping up the pace of its electric campaign with 10 new electric models by 2026.

“Volkswagen already has the broadest portfolio of electric models. By 2026, the brand will have the right product in every segment, from the entry-level e-car with a target price of under €25,000 [£22,000] to the new flagship ID 7.”

Moreover, Volkswagen expects shortages to ease throughout 2023 and for production volumes to eventually stabilise.

“We're doing our utmost to reduce delivery times for our customers still further and to lower the high order backlog as quickly as possible,” said Labbé.

Volkswagen also noted a growth in demand for SUVs throughout 2022. The bodystyle’s share of the brand’s total sales rose by 4% to 45%. And this share was significantly greater in the US, at 80%.