Gauges are calibrated based on certain input values. If the old CVH sensor is not using the same range, you'll get odd readings. I've had this with many an install, even with ECU's you need to calibrate/map the sensor values so it actually maps to the real temperature.
Chances are the gauges is fine, and the sensor is fine - but they are incompatible if you want accurate readings. If VDO give you the values, then you can probably do some easy maths to work things out to rescale in your head - or of course find a sensor that will fit that uses the correct range

If you want to work out the working range/scaling for the CVH sensor, this might help.
https://www.tiepie-automotive.com/en...erature-sensor

Worst case you could print a new gauge face to work with the CVH scaling if you didn't want to replace the gauge or sensor