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Volkswagen AG Chief Executive Officer Herbert Diess provided an upbeat outlook for the back half of this year even as Covid-19 and a global shortage of semiconductors is poised to hit first-quarter results.

“I am looking forward to 2021 and I expect that the global economy will see an upturn in the second half of the year, by which time we should see ongoing vaccination programs take effect," Diess told executives in an internal webcast Monday, according to remarks seen by Bloomberg News. “Then I expect people to buy more cars. We should prepare for a significant upturn."


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The webcast was Diess’ first with top managers this year and was attended by new VW group management board members Murat Aksel and Thomas Schmall. A VW spokesman confirmed the remarks.

Europe’s largest automaker lost the top spot in global sales to Toyota Motor Corp. last year, but it sold more electric cars than Tesla Inc. in Europe and is escalating the world’s biggest push into purely battery-powered vehicles. VW will roll out the ID.4 crossover under its namesake brand in 2021 and add more versions of the Audi e-tron and Porsche Taycan models. The two luxury brands generate the biggest chunk of profits for the German industrial giant.

(Also read | Volkswagen opens first plant for recycling electric car batteries)

Diess said last month during a US investor roadshow hosted by UBS Group AG that VW expects to sell roughly 600,000 purely battery-powered cars this year, with the ID.4 accounting for 150,000 cars. He emphasized though that VW will seek to protect margins while boosting sales volumes.

The CEO and key stakeholders agreed in December to hammer out a deal in the first quarter to lower fixed costs and material expenses to become more nimble. Diess acknowledged Monday that VW navigated the dramatic industry slump last year less well than some of its rivals.

“We have set ourselves the target of reducing overheads by 5% and material costs by 7%," Diess said. “This is necessary so that we have the strength to finance topics important to our future ourselves, since our market capitalization and governance structure do not allow us to raise additional equity."