Volkswagen remains optimistic despite recent sluggish business. Demand is already increasing again, including for electric cars. However, the previous earnings pearl, Audi, is surprisingly becoming a problem child.
After a slow start to the year, the Volkswagen Group expects business to pick up in the coming months. “We expect a significant improvement in the second quarter,” said CFO Arno Antlitz when presenting the balance sheet for the first three months. “A strong March, the solid order situation and the improving order intake in recent months are encouraging.”
Despite the slow start, he was confident that he would achieve the goals he had set for the year as a whole and increase sales, revenue and profit.
In the months January to March, Europe’s largest car manufacturer suffered primarily from weak new business. Sales fell by one percent to almost 75.5 billion euros, and operating profit fell by a fifth to 4.59 billion euros. The bottom line is that the group earned 3.7 billion euros in the three months, one billion less than a year earlier.
The group had already reported an increase of a good three percent in deliveries to end customers in the middle of the month. Sales, which are crucial for sales, fell by two percent to 2.08 million cars. While dealers handed over more cars to customers than a year earlier, the group sold fewer vehicles to these same dealers, which reduced revenue.
New business is slowly picking up again
Above all, the weak new business was causing problems for the group, especially with electric cars. After the state purchase bonus was abolished at the end of 2023, demand here literally collapsed. In the meantime, business with the electric vehicles that are important for VW is picking up again, said Antlitz. “We had a weak January, but February and March were strong.” Compared to the previous year, the number of newly ordered electric vehicles more than doubled in the two months.
Overall, order intake also increased in March, said Antlitz. In the coming months, he expects order numbers to continue to rise, especially for electric cars, thanks to numerous new models such as the Golf facelift and the new Passat. In addition, the order book is still well filled. In Europe alone, the order backlog is 1.1 million vehicles, of which 160,000 are electric cars.
VW needs the electric cars above all to meet the EU’s requirements for CO2 emissions in the fleet. Antlitz was confident that this would be successful this year. And they want to do it next year, too, when the EU tightens the requirements. “2025 will be more challenging,” admitted Antlitz. “But from today’s perspective, we can do that too.”
Audi as the new problem child
The subsidiary Audi, which, alongside Porsche, was previously considered a stable source of income in the group, became a burden in the first quarter. Because there weren’t enough V6 and V8 engines for the high-yield top models, sales and profits collapsed. In terms of return on sales, Audi ended up with only 3.4 percent, far behind the traditionally weak core brand VW, which came in at 3.7 percent.
Antlitz announced that they now want to resolve the engine bottleneck quickly. Audi is in the process of increasing capacity for the large engines and bringing new suppliers on board. An improvement in supply will be seen here in the next few months. “Audi will return to its old strength,” said Antlitz with conviction.
Source: Stern
