Volkswagen Group posted strong financial results during the first quarter, despite a difficult global environment.
Article continues below
Volkswagen mitigated the impact from worldwide shortages of semiconductors and wire harnesses by reallocating resources between its main markets in Europe, China, and the Americas.
This resulted in sales revenue of EUR 62.7 billion (+0.6 percent) and a robust operating profit before special items of EUR 8.5 billion including positive effects mainly from commodity hedging activities.
Even excluding these effects, the underlying operating profit of around EUR 5 billion lies significantly above previous year and underlines the robustness of the business.
Based on the figures and the expected better semiconductor supply in the second half of the year, the Group confirms its outlook for 2022.
However, it is not yet possible to conclusively assess in particular the specific effects of the latest developments in the Russia-Ukraine conflict or effects of the Covid-19 pandemic on the Volkswagen Group’s business, on the global economy and growth in the industry in fiscal year 2022.
Volkswagen Group will continue to bolster its expansion in global growth markets. A special focus will be on the North American region, especially the United States, where an ambitious growth plan is being implemented to achieve the target of 10 percent market share by 2030.
Battery-electric vehicles (BEVs) will be the central element of this strategy, with the Group’s BEV portfolio growing to more than 25 models by the end of the decade.
Furthermore, the Group is targeting a dedicated battery cell production in the United States.
Volkswagen just recently announced a USD 7.1 billion commitment to boost its BEV product line-up, R&D, and manufacturing in North America.
Volkswagen has maintained a high pace in its largest single market China accelerating digitization and electrification. Volkswagen Anhui will be the new e-mobility hub, with the production of MEB based models starting in 2023.
A battery system factory will also start production there next year.
The Group therefore dedicated investments of EUR1billion each to Anhui and Gotion.
To better tailor the user experience of the Group’s software stack to the needs of Chinese customers, CARIAD has started operations in Beijing with 600 employees already, aiming for nationwide distributed R&D network with Beijing, Shanghai, Chengdu, and Hefei earmarked as initial hub locations.
Leveraging local talent is key to enhancing the company’s R&D competence in China.
VW brand, Seat and Commercial Vehicles saw an increase in margins. Only Skoda saw a decline as they are consolidating the Russian business. The Volume brand group generated sales revenue of €24.4 billion (€27.4 billion) and an operating profit before special items of €0.9 billion (€1.4 billion). ■