Source: AFP
German carmaker Volkswagen on Wednesday reported a disappointing 2023 profit growth boosted by higher vehicle deliveries, but gave a cautious outlook for this year.
Net profit rose 13.1 percent to 17.9 billion euros ($19.6 billion) from a year earlier. Sales rose more than 15% to 322.3 billion euros.
Analysts polled by financial data firm FactSet had forecast profits to reach 15.7 billion euros, slightly down from 2022.
Overall, Volkswagen delivered around 9.2 million cars to customers in 2023, an improvement of 12%.
This was the first increase in deliveries after three straight years of declines, after production was disrupted by shortages of key components amid supply chain problems.
The auto giant’s unit sales rose 20% in Europe and 18% in the North American region.
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In China, sales also rose, but at a much more modest 1.6%. Growth was slower than the previous year and was the latest evidence that Volkswagen is losing ground in its most important market.
Volkswagen fell behind its domestic rivals in China, losing its title as the best-selling car brand to BYD.
The 10-brand conglomerate — whose models include Audi, Porsche and Skoda — last year singled out China and the United States as key markets for its future growth and is also seeking to boost margins.
Looking ahead, the German auto giant expects vehicle deliveries to advance in 2024, but by as little as 3% due to tougher international competition and potential supply chain issues.
He warned of “persistently high inflation in major economic areas” as well as “ongoing geopolitical tensions and conflicts”, pointing to the Ukraine-Russia war and “confrontations in the Middle East”.
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Volkswagen sold 771,000 battery cars in 2023, 35% more than the previous year, but still only 8.3% of the group’s total sales.
The auto industry has plowed huge sums into producing more electric vehicles, but there have been concerns that this shift is lagging, amid weak demand and a weak global economy.
In recent months, Volkswagen has flagged plans to cut its workforce and also unveiled a 10 billion euro savings plan as it seeks to boost profitability and restart its faltering electric shift.
Its profit margins are slipping below its long-term target of between 9 and 11 percent.
Source: AFP