BERLIN (Reuters), -World No. Volkswagen (DE), 2nd carmaker, warned that supply and semiconductor bottlenecks could cause a slowdown in growth.

After Friday’s 2021 results, CEO Herbert Diess stated that “the war in Ukraine has put us into question our existing outlook,” warning that the future volatility of commodity markets is likely until 2026.

Diess claimed that Volkswagen has become stronger through the coronavirus outbreak and would still be able to function under normal circumstances. This gives him reason for optimism in 2022.

According to Arno Antlitz (finance chief), the group reduced overhead costs faster than expected last year. This resulted in 4 billion euros ($4.4billion) of savings compared with 2019. The potential initial public offering by Porsche, a sports car manufacturer, will add flexibility and additional value.

Antlitz stated that Porsche’s IPO may still be possible in the fourth quarter 2022, despite market uncertainty.

Volkswagen however sold two million fewer vehicles than it had planned due to shortages of semiconductors. It stated on Tuesday that although the situation will improve over the next year, growth could be slowing down.

The report also indicated that commodity prices would rise in the coming year due to Russia’s invasion Ukraine. This has led to a spike in metals such as palladium and nickel, essential for car production.

Volkswagen announced Friday that its 2021 operating profit increased by just over 20 billion euros due to higher prices, better product mixes and lower total units deliveries. This despite the fact that overall unit sales were at a 10-year low 8.9 million.

It stated that it plans to grow its deliveries by 5–10% by 2022, and increase revenues by 8-13% by looking ahead, Friday.

It has a Kaluga production facility in Russia as well as financing and sales companies. The company said that further sanctions against Moscow could impact the country. The group does not own any subsidiaries in Ukraine or equity investments.

However, its business activities in Russia, Ukraine and elsewhere aren’t significant.

Volkswagen saw an increase in revenue in all regions, even in Asia Pacific where there was a decline in units. The semiconductor shortage in China meant that it could sell more cars there.

Japan’s Toyota and Volkswagen temporarily stopped production in some Chinese plants due to COVID related lockdowns. Toyota also warned that suspensions may continue until the end.

($1 = 0.9081 euros)