Volkswagen Is Working On A New Plan To Mitigate The War’s Destructive Effects On The Industry

    Volkswagen, which has withdrawn from the Russian market, is reportedly working on a new growth plan. It is stated that the reason behind this decision is the effect of war and problems in the supply chain.

    After Russia’s invasion of Ukraine, many global companies decided to leave the Russian market in order to show their reaction; One of these companies was the automobile giant Volkswagen (VW). However, as you can imagine, leaving the market of a country like Russia, where a large amount of income comes from, can have very heavy economic consequences for companies.

    Accordingly, Volkswagen, which stopped production in its factories in Russia, is now reportedly working on a new growth plan. According to a recent LinkedIn post by VW Group CEO Herbert Diess, supply chain issues that occurred after Volkswagen left the Russian market are behind this decision.

    Geopolitical changes and chip shortages push VW to new growth plans

    In the post in question, Diess states that the recent geopolitical changes and the devastating effects of the war reveal the global vulnerability of the company, especially across the US. All these developments have deeply shaken the automotive industry as it affects every sector, and companies are looking for new solutions to this problem.

    VW has been having supply chain problems lately, not only because of the occupation of Ukraine, but also because of the semiconductor chip shortage. Reporting that deliveries dropped by 37 percent in March compared to the previous year also shows the serious dimensions of the problem. 

    While the situation in Ukraine delayed the launch of the ID.5 by a month due to VW’s reliance on some parts made in Ukraine; The increasingly strained relationship with China makes it difficult to increase sales in the East. For this reason, it is stated that VW could not reach its target of 100,000 electric vehicle sales by 20 percent. Considering that China accounts for 40 percent of all VW sales and people here are much more willing to adopt electric cars, this means a huge loss for the company.

    Noting that VW’s plan is not ready yet, Diess states that more details about the plan will be shared in the coming weeks. 

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