FRANKFURT (Reuters) -Volkswagen AG, Europe’s largest carmaker, on Friday said that Russia’s invasion of Ukraine could dent business this year, as it reported a doubling of operating profit for 2021.
Carmakers including Volkswagen and BMW are scrambling to find alternative sources of vital parts made in Ukraine from as far afield as China and Mexico, as Russia’s invasion halts assembly lines and breaks complex supply chains.
“There is a risk that the latest developments in the war in Ukraine will have a negative impact on the Volkswagen Group’s business. This may also result from bottlenecks in the supply chain,” the company said.
The doubling of operating profit in 2021 was thanks to higher prices and a more favorable product mix, Volkswagen said. The company said it expects an operating margin on sales of 7.0%-8.5% in 2022, compared with 7.7% in 2021.
(Reporting by Christoph Steitz; Editing by Tom Sims)