In a surprising twist, Russia’s invasion of Ukraine will place “a sizeable number” of more new crossovers on the tons of U.S. Volkswagen dealerships in coming months.

Speaking Tuesday throughout Volkswagen Group’s annual push convention, CEO Herbert Diess claimed the German automaker would change additional production to North The usa and China, at least quickly, as a result of the war.

That’s envisioned to suggest greater output from VW-brand crops in Chattanooga and Puebla, Mexico, as perfectly as the Audi plant in San Jose Chiapa, Mexico, all of which assemble crossovers marketed principally in the U.S. Chattanooga builds the three-row VW Atlas and two-row Atlas Cross Sport and is at the moment developing non-saleable pilot variations of the ID4 battery-electric powered crossover, when Puebla assembles the VW Tiguan and Taos. The Audi plant makes the popular Q5.

The automaker’s plants in China were also predicted to gain, as scarce microchips that would usually be destined for use in Europe are reallocated to China and North The us.

A lack of wire harnesses ordinarily sourced from Ukraine was the most sizeable source chain constraint at the moment, Diess reported, influencing most German plants. If VW could not relocate generation in a few to 4 weeks, its outlook would want to be revised, Diess mentioned.

VW also warned that semiconductor shortages, offer bottlenecks, substantial commodity price ranges and the Russia-Ukraine conflict could hit growth in 2022 as the problems struggling with the car marketplace mount.

“The war in the Ukraine has place our existing outlook into question,” Diess said.

A spokesman for VW Team of America verified that if given the opportunity to make a lot more vehicles for North The us — i.e., by acquiring a increased variety of scarce microchips from VW’s global suppliers — the company would do so, and he mentioned it would maintain its dealers educated of upcoming variations.

VW brand sold 375,030 cars in the U.S. in 2021, up 15 p.c from 2020. Amid those sales, 73 p.c had been crossovers. VW has a 2.5 percent sector share in the U.S., and it has a extensive-expression objective of attaining a 10 percent current market share, like revenue from other group brand names: Audi, Porsche, Bentley and Lamborghini.

Tom McMenamin, chairman of the VW National Vendor Advisory Council, confirmed sellers were being anticipating to “see a sizeable number” of further North American-developed cars heading to their tons as a result of the shift. He declined to specify how lots of added units of manufacturing.

McMenamin stated having extra crossovers from Chattanooga and Puebla for VW’s 638 U.S. dealerships probably would permit the model to achieve U.S. sector share as other automakers continue to battle with their personal provide constraints. “It really is likely to make all the big difference in the world to the sellers, and it truly is likely to give us a competitive gain in our markets due to the fact we will have solutions and most of our opponents won’t.”

By Tara