(Bloomberg) -- Volkswagen AG has lowered its sales target in China by roughly 14% for this year as the country reinstates its Covid-Zero policy that led to widespread supply-chain disruptions for the auto industry.

The German carmaker plans to sell 3.3 million cars in China this year, on par with the previous year’s results and about a half million fewer than the 3.85 million previously estimated, the company’s China chief Ralf Brandstaetter said in an interview with Handelsblatt newspaper published Tuesday. 

VW had reiterated its earlier target for China deliveries as recently as July, but in October said that its 2022 sales would be similar to the year before as global economic headwinds continued to build and supply-chain problems persisted. 

Brandstaetter said that VW needs to investment more in China to compete with local electric-vehicle brands that accounted for almost 80% of EV sales there in the first seven months of 2022, according to the China Passenger Car Association. VW expects electric-car sales to double in China.

VW competitors Mercedes and Tesla have recently lowered prices compete in China, the world’s biggest market for EVs. 

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