Unlike Tesla, Volkswagen's Passenger Cars Brand Confident In Overcoming Red Sea Disruptions: Report

German auto giant Volkswagen AG’s VWAGY passenger cars brand has reportedly assured that the recent Red Sea attacks are not likely to cause “significant” disruptions in their production processes, contrasting with Tesla Inc’s TSLA move of substantial production halts at its German facility.

The company has been collaborating with shipping companies and vigilantly monitoring the situation to gauge its impact on production and market supply, aiming to prevent any possible disruptions, reported Reuters.

In response to the evolving geopolitical situation, most major shipping companies have already started rerouting their vessels as early as December.

This strategic move is expected to guarantee timely freight delivery, albeit with minor delays.

Tesla is reportedly suspending most car production at its Giga Berlin factory for two weeks following armed conflicts in the Red Sea, as longer transportation times are impacting the supply chains.

The Red Sea constitutes around 12% of maritime traffic worldwide, posing risks for further disruptions for companies globally.

The automaker also reported deliveries in 2023 grew by 12% to 9.24 million vehicles. All regions contributed to this growth, with Europe

(+19.7 percent) and North America (+17.9 percent) being the main drivers. China, the Group’s largest single market, grew by 1.6% despite a challenging market environment.

SEAT/CUPRA achieved the highest increase in the passenger car segment with a rise of 34.6%, while MAN led the way in the truck segment with an increase of 37.1%. 

Volkswagen Group delivered 771,100 fully electric vehicles, corresponding to an increase of 34.7% compared to the previous year. The share of all-electric vehicles in deliveries rose to 8.3% compared to 6.9% in 2022.

Also Read: Volkswagen Adds ChatGPT In The Driver’s Seat For These Models — But Only In Europe For Now

Price Action: VWAGY shares closed higher by 0.37% at $13.49 on Thursday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Photo by Ivan Radic via Flickr