VW’s Skoda Sees Ukraine War, Supply Bottlenecks Impacting 2022 Operations

VW’s Skoda Sees Ukraine War, Supply Bottlenecks Impacting 2022 Operations

FILE PHOTO: A logo is seen on a wheel of a Skoda Octavia car after a presentation of the company's annual results in Mlada Boleslav

FILE PHOTO: A logo is seen on a wheel of a Skoda Octavia car after a presentation of the company’s annual results in Mlada Boleslav March 20, 2013. REUTERS/David W Cerny

March 22, 2022

PRAGUE (Reuters) -The war in Ukraine and supply bottlenecks will put a significant burden on Skoda Auto’s operating business in 2022, the Czech carmaker said on Tuesday, although it expects the supply of semiconductors to improve in the second half of the year.

The carmaker, part of the Volkswagen Group and the Czech Republic’s biggest exporter, reported on Tuesday a 3.9% year-on-year increase in sales revenue in 2021, to 17.7 billion euros ($19.48 billion).

Operating profit rose 43.2% to 1.1 billion euros.

The company had already reported a 12.6% drop in 2021 deliveries, to 878,200 cars, as the global chip shortage cut into production. 

Like other carmakers it faces more supply issues after Russia’s invasion of Ukraine last month. 

It has had to stop production of its electric ENYAQ iV model and has said its SCALA and KAMIQ model production was also at risk because of the unavailability of wiring harnesses from Ukrainian suppliers.

“The company expects significant burdens on its operating business in 2022 due to the war in Ukraine and supply bottlenecks,” Skoda said in a release on Tuesday.

Skoda, like VW, has also suspended production and other business activities in Russia, which was its second-largest market last year, with 90,400 vehicles delivered.

($1 = 0.9085 euros)

(Reporting by Jason Hovet, Editing by Louise Heavens, Kirsten Donovan)