Volkswagen production at the main plant in Wolfsburg: The current quarterly figures are still very decent. But things could look very different as early as 2023.
(Photo: Reuters)
Dusseldorf Higher deliveries and better selling prices have boosted Volkswagen’s profits. In the third quarter, the operating result jumped by almost two thirds to around 4.3 billion euros, as the group announced on Friday. Analysts had expected around 400 million euros more on average. However, the costs of the Porsche IPO and write-downs due to the suspension of the Russian business burdened the result with a total of 1.6 billion euros.
Due to ongoing supply bottlenecks and the looming recession, Europe’s largest car company has become more pessimistic when it comes to sales: instead of growth of five to ten percent, the group now expects deliveries to be only in the magnitude of the previous year.
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“In the third quarter, Volkswagen made good progress on the way to more sustainable value creation for the shareholders,” explained the new CEO Oliver Blume, who also heads the sports car subsidiary Porsche AG. Above all, he emphasized progress in the China business and in the USA. Progress has also been made in securing the raw materials for the ambitious plans in e-mobility. Sales climbed 24 percent to 70.7 billion euros.
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“This quarter was another step on the way to achieving our goals,” said Chief Financial Officer Arno Antlitz. He confirmed the forecast for sales and profitability. Volkswagen therefore continues to assume that revenue will increase by between eight and 13 percent this year and that the operating return will end up at the upper end of the forecast range of between 7.0 and 8.5 percent.
Settlement of Argo AI costs VW billions
The bottom line is that quarterly profit fell by more than a quarter because Volkswagen had to deduct 1.9 billion euros from the financial result for the winding-up of the robot car startup Argo AI, which it holds with Ford. Volkswagen has not yet named the future partner for autonomous driving. Reuters, citing insiders, reported on Thursday that the group would expand its collaboration with Mobileye to make up for the loss of Argo.
The increase in the operating result was so high mainly because the semiconductor crisis and corona lockdowns in China slowed down production a year ago. According to experts, the special boom, in which car manufacturers mainly sold high-yield vehicles and raised prices due to the lack of parts, is coming to an end.
Deliveries rose by around eleven percent to 2.2 million vehicles in the period from July to September. This was mainly due to the fact that backlogged orders were being processed. Due to the easing of supply chain problems, however, the proportion of high-volume vehicles, from which mass manufacturers such as VW earn less, is now increasing.
In 2023, automakers will see the next crisis brewing when high inflation, rising interest rates and the energy crisis in Europe will have an impact on Russia’s war in Ukraine.
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