Volkswagen improves cost efficiency and profitability
The Volkswagen brand has sustainably strengthened its profitability in the first quarter of 2022, according to a recent announcement.
According to the statement, operating profit rose to 513 million euros in the first three months before special items (Q1 2021: 490 million euros). Sales reached almost €15 billion (Q1 2021: €17.6 billion) due to an optimised model and pricing policy, while the number of deliveries in the same period was around one million vehicles (Q1 2021: 1.36 million) due to the impact of the Ukraine war, the global semiconductor bottleneck and the recent Corona measures in China. In contrast, the operating return on sales before special items increased to 3.4 per cent (Q1 2021: 2.8 per cent).
"We have been able to further improve profitability in a difficult environment. This confirms that Volkswagen has taken the right path with the ACCELERATE strategy to sustainably increase competitiveness and profitability," said Volkswagen CEO Ralf Brandstätter. The manufacturer has thus "created a very solid foundation for the accelerated transformation to CO2-free and fully networked mobility".
To further strengthen its competitiveness in the long term, Volkswagen continues to work intensively on its cost efficiency - among other things, a further reduction of fixed and overhead costs is targeted. "We are currently facing various challenges such as geopolitical uncertainties, sharply rising raw material and energy prices as well as the effects of the pandemic in China. We are working against these risks with our cost reduction measures and the targeted increase in earnings quality. However, we are sticking to our target of a six per cent operating return on sales in 2023," said Volkswagen CFO Alexander Seitz. The forecast depends on the further course of the war in Ukraine and in particular its impact on the global economy and thus on the business activities of Volkswagen Passenger Cars. At present, customer demand remains very good, both for combustion engines and in the field of electromobility.
According to the manufacturer, 53,400 all-electric vehicles (BEV) were delivered in the first three months (+74 per cent). The all-electric ID.4 plays a key role here. With 30,300 units, more than every second e-car delivered was an ID.4. Production capacities for the electric bestseller are currently being expanded at full speed. The Emden plant is scheduled to start series production of the ID.4 as early as 20 May 2022, thus creating additional capacity for the successful model. In the second half of the year, the ID.4 will also roll off the production line at the US site in Chattanooga, where VW is reportedly planning to build a second plant. Demand for the entire ID. family remains high - in total, more than 120,000 customer orders have been placed in Europe for the ID. models alone.
The order backlog across all drive types is at an all-time high of more than 670,000 vehicles for Europe alone. The company is therefore working intensively to keep delivery times for customers as short as possible and to process the high order backlog as quickly as possible.