Volkswagen China believes the shortage of chip supply is alleviating Reuters

BEIJING (Reuters)-German automaker Volkswagen (OTC:), China’s largest foreign automaker in the world’s largest auto market, said on Friday that it expects chip supply to improve in the next six months.

Due to manufacturing delays, automakers around the world have had to adjust assembly lines, and some semiconductor manufacturers blame it on the faster-than-expected recovery from the coronavirus pandemic.

“We hope that the chip supply crisis will bottom out this summer and expect this situation to improve in the second half of this year,” Stephan Woellenstein, head of Volkswagen (DE:) China, told reporters.

Woellenstein said that starting in August, Volkswagen will purchase some chips from new suppliers, adding that this move will begin to ease the shortage in September.

Due to the shortage of chips, Volkswagen, which has a cooperative relationship with FAW Group and SAIC, had a 12.3% year-on-year decline in sales from April to June. Volkswagen’s rival General Motors Corporation (NYSE:) said its sales in China increased by 5% in the second quarter.

Wallenstein said that high-end brands including Audi and Porsche are growing. In the first half of this year, Audi’s sales in China increased by 39% year-on-year, while Porsche’s sales increased by 23%.

Woellenstein also said that Volkswagen’s electric ID.4 car sales reached 2,900 in June, up from about 1,500 in May. Reuters reported last month that the ID series-the backbone of its electric car ambitions-even company sources called its slow start in China worrying.