Chipping area?-as in stone chips??
Yes. It does look like the cause might have been a stone chip.
Not a mk7 / mk7.5, but I suspect the wheel arch liner is attached in the same way as it is on the mk6 Golf - held in place by a number of torx head screws. There’s a YouTube video of a mk6 Golf GTI rear wheel arch liner being removed at the link below;
https://www.youtube.com/watch?app=desktop&v=f9T_9RtU0z4I notice that the black plastic sill extension doesn’t seem to sit flush with the sill (you can see the fixing strip behind the sill extension in the picture - on the two Polo GTI’s I’ve owned with the same style and design of plastic sill extensions, the fixing strip is completely concealed).
It might’ve just been poorly fitted in the factory, or maybe they’re all like that on the mk7 / mk7.5 Golf GTI / GTD?. Alternatively, if @willni hasn’t owned the car from new, that gap between the plastic sill extension and the metal sill might suggest the sill extension has been removed / refitted at some point prior to @willni owning the vehicle - maybe for paint repairs to be carried out on that lower corner of the wheel arch? If so, then if poor or substandard prep work has been carried out prior to repainting, or repainting has been done in an unsuitable environment that’s not temperature / humidity controlled (SMART repair?), could that mean the new paint in that area is a weak point that’s more susceptible to stone impact damage?
