Despite challenges in the market, Volkswagen Group delivered solid nine-month results. Sales volumes and revenues increased in the third quarter, but profitability fell short of expectations. The company is focusing on implementing its 10-point plan and cross-brand performance programs to improve profitability.
Key highlights from the report:
Robust Results in the First Nine Months
The Group’s operating profit decreased by 7% to 16.2 billion euros, mainly due to negative valuation effects. Adjusted for these effects, the operating profit increased to 18.7 billion euros, with a return on sales of 8.0%.
A significant volume increase in Passenger Cars contributed to the positive results, but production disruptions and higher product costs affected profitability for the Core brand group.
Financial Outlook for Fiscal 2023
Volkswagen AG updated its outlook, expecting deliveries to customers to be between 9 and 9.5 million vehicles. Group sales revenue is expected to be 10 to 15% higher than the previous year.
The company no longer expects to compensate for the effects of negative valuation of hedging transactions by the end of the year, resulting in an operating result for the full year around the previous year’s level.
Electrification Strategy
Deliveries of battery electric vehicles (BEV) increased by 45% in the first nine months. The targeted annual range of 8-10% of total deliveries remains in sight.
Volkswagen-owned battery maker PowerCo and Belgian materials technology group Umicore announced the location for their cathode material manufacturing plant in Nysa, Poland. The partnership aims to produce materials for battery production sufficient for around 2.2 million fully electric vehicles annually by the end of the decade.
Competitive Product Portfolio
The all-electric ID.7 was voted “German Car of the Year 2024”. Volkswagen also unveiled the new generation of the Tiguan and launched pre-sales of the upgraded ID.4 and ID.5.
Audi launched several models in its Q8 family, including the SQ8 e-tron as the new top model of the all-electric SUV and crossover. Porsche increased the hybrid range of the Cayenne series.
Group-wide Performance Programs
All brands within the Group have launched performance programs to strengthen their competitiveness and achieve a long-term operating return on sales of over 10%.
Sustainability
Volkswagen Group published its Responsible Raw Materials Report, focusing on transparency in supply chains. The Group also issued its first Green Hybrid Bond and Green Bond through Volkswagen Leasing GmbH.
Brand Group Results
The Core brand group saw an increase in sales revenues, but profitability was affected by higher product costs and production disruptions. The Progressive brand group and Sport Luxury brand group reported positive results. TRATON and Financial Services divisions also showed growth in sales revenues.
Note: The article contains a summary of Volkswagen Group’s financial results and highlights. Please refer to the original article for complete information.