BERLIN (Reuters) – German carmaker Volkswagen expects a continued hit from a shortage of semiconductors this year, although it should be able to ramp up production in the second half of the year, Chief Executive Herbert Diess said on Wednesday.

“The supply situation is getting better, but even in 2022 we will not be able to build all the cars we could sell. But we

see opportunities for further production increases, especially in the second half of the year,” Diess said in a speech.

Carmakers around the world have been hit by a shortage of semiconductors caused by COVID-19 supply-chain disruptions as well as soaring semiconductor demand at consumer electronic companies.

Volkswagen said in early February that night shifts at Wolfsburg would be cut on some production lines because of the lack of chips. Diess said capacity adjustments would also be needed in the medium term.

Diess said the supply of chips was the only major challenge at the moment, with top models of its premium brands already sold out for the whole of 2022, while its truck businesses also have well filled order books.

(Reporting by Jan Schwartz, writing by Emma Thomasson; Editing by Madeline Chambers)