VW set to boost output, pick new EV plant site, amid chip crunch


FILE PHOTO: The logo of German carmaker Volkswagen is seen on a rim cap in a showroom of a Volkswagen car dealer in Brussels, Belgium July 9, 2020. REUTERS/Francois Lenoir

BERLIN (Reuters) -Volkswagen could decide on where it will build a new electric-vehicle plant by the end of March, and plans to boost overall output in the second half of 2022 even though a chip shortage is expected to persist this year.

The company had said last year it would build a new state-of-the-art car factory close to its headquarters in Wolfsburg, Germany, to raise its game as electric-vehicle rival Tesla builds a plant near Berlin.

The factory is part of VW group's Trinity project, under which the carmaker wants to build a flagship electric sedan in Wolfsburg from 2026, a move the VW works council - the company's union - hopes will secure the site's future as Volkswagen prepares to stop selling internal combustion-engine cars in Europe from 2035.

"We are fighting for Trinity production right here in Wolfsburg, which means either on the factory site or in the direct vicinity of the main plant," works council head Daniela Cavallo said in a statement.

Volkswagen's share price tumbled in the last quarter of 2021 but has partially recovered in recent months, rising slightly on Wednesday's news from 187.8 euros ($213.81) at the opening to 188.14 euros.

The works council said Volkswagen produced 330,000 fewer vehicles than originally planned at the Wolfsburg plant last year due to a lack of semiconductors, with just under 400,000 vehicles rolling off the production line.

The carmaker said in early February that night shifts at Wolfsburg would be cut on some production lines because of the lack of chips.

Despite the chip supply challenges, Chief Executive Herbert Diess said in another statement on Wednesday he hoped to increase production in the second half, with top models of Volkswagen's premium brands already sold out for all of 2022, and its truck businesses also seeing well-filled order books.

"The coming months will be hard, but we will carry on being the leading plant for the whole Volkswagen Group here in Wolfsburg. This is where we set the direction for the company," Cavallo said.

($1 = 0.8783 euros)

(Reporting by Jan Schwartz and Victoria Waldersee, writing by Emma ThomassonEditing by Madeline Chambers and Bernadette Baum)

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