Chip shortage puts the brakes on Volkswagen

Volkswagen cut its outlook for deliveries, toned down sales expectations and warned of cost cuts, as a shortage of computer chips caused the world's No. 2 carmaker to report lower-than-expected operating profit for the third quarter.

VW, which has outlined an ambitious plan to become the world leader in electric vehicle sales, now expects deliveries in 2021 to be only in line with the previous year, having earlier forecast a rise.

The scarcity of chips has plagued the industry for most of the year and also ate into quarterly results of key rivals Stellantis and General Motors.

Shares in Volkswagen, Europe's largest carmaker, were indicated to open 1.9% lower in pre-market trade.

Chief Financial Officer Arno Antlitz said in a statement on Thursday the results showed the firm had to improve cost structures and productivity in all areas.

Third-quarter operating profit came in at $3.25 billion, down 12% versus last year.

Volkswagen aims to overtake Tesla as the world's largest seller of EVs by the middle of the decade.