Planned catch-up in China
VW is on the right track – sales are increasing
05/04/2023, 06:25 p.m
Like the competition at the beginning of the year, Volkswagen can process orders and deliver more cars by easing the supply chains. That drives sales and profit. The Wolfsburg team confirm their ambitious prognosis. The market in China remains under construction.
Driven by more deliveries to customers, the carmaker Volkswagen took in and earned more than expected at the beginning of the year. The core brand VW and the commercial vehicle business around Traton gave the DAX group a tailwind. In view of further rising costs and an expected tougher competition in the second half of the year, VW is cautious, but still relatively optimistic about the year as a whole. The multi-brand group handed over a good two million cars, trucks and buses to customers worldwide, 7.5 percent more than in the same period last year.
The availability of semiconductors will improve as the year progresses, said CFO Arno Antlitz. As a result, however, more cars from the volume segment – with generally lower margins than cars from the premium segment – would come onto the market. Ultimately, this should increase competitive pressure and weigh on margins.
Nevertheless, VW confirmed the forecast for the full year from early March, which was sometimes classified as optimistic: the operating return on sales should be between 7.5 and 8.5 percent with sales increasing by 10 to 15 percent. Deliveries are expected to total around 9.5 million vehicles.
In the first three months, VW benefited in particular from the volume group around the core brand VW as well as Skoda and Seat. Group-wide, revenue increased by more than a quarter to 76.2 billion euros. Operating VW earned almost 5.8 billion euros, a third less than in the same period last year, but significantly more than expected. While the core brand around VW, Seat and Skoda yielded twice as much in operational terms, the premium brand group around Audi, Bentley, Lamborghini and the motorcycle brand Ducati halved the result. Commodity hedging transactions were the reason for the decline in profits. The high-yield sports car subsidiary Porsche drew its own circles with an operating profit increase of more than 25 percent.
In China for China
CFO Antlitz admitted during the press conference that the group had a rather slow start in China with electric cars. In the meantime, VW is catching up. New cars should be geared more towards the tastes of Chinese customers – “in China for China” is the magic formula. Component development and procurement are combined to reduce development times by .
Nevertheless, in an increasingly polarized world, Volkswagen is relying more heavily on the USA, but does not want to lose its leading position in China as a result. “Volkswagen will continue to make resolute investments in its most important growth regions worldwide,” stressed Antlitz. Europe’s largest car company, which now has around 677,000 employees and more than 100 plants around the world, is using the massive incentives in North America to invest in climate-friendly mobility and is building a large battery cell factory in Canada. In the US state of South Carolina, a plant is also being built for the electrified off-road vehicle brand Scout, with which the Wolfsburg-based company intends to leave its niche role in the second most important car market. At the same time, the Wolfsburg-based company is investing one billion euros in a new development center for connected vehicles in China.