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Wednesday, March 29, 2023

Car manufacturer: VW core brand earns more despite the drop in sales

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Increasing earnings, fewer sales – this is the basic formula for the business situation of the world’s second largest car manufacturer in 2022.

The core brand of the Volkswagen Group achieved a better result last year despite a sharp drop in its deliveries. As the Wolfsburg-based company announced on Tuesday before its annual press conference in Berlin, profits from ongoing business – excluding special factors – rose by 22.5 percent to almost 2.65 billion euros. At the same time, VW was able to bring significantly fewer cars to customers with around 4.6 million vehicles (minus 6.8 percent), the main reason for this being the ongoing supply problems with microchips and electronics, for example.

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Sales of the main VW division climbed by 8.7 percent to 73.8 billion euros. The fact that more was left in the cash register in the end was partly due to the higher car prices, which had risen noticeably in 2022 as a result of general inflation, but also because of the scarce supply on the new and used car markets.

In this context, Volkswagen spoke of “improved price enforcement”. In addition, the scope of the sales aids has decreased – the discounts for many retailers have recently decreased. The purchase premiums for models with alternative drives, some of which are financed by the state and some by industry, are no longer as high as they were when electric vehicles were first subsidised. On the other hand, increased spending on raw materials weighed on the balance sheet. The return increased slightly by 0.4 points to 3.6 percent.

Source: Stern

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