VW's global sales hit a record high of 6.29 million in 2009,
sets medium-term target at 8 million
Its 2009 sales in China are 1.4 million, while Russian and Indian new plants go live
VW refreshes its global sales record to 6.29 million vehicles in 2009
Medium term targets in line with the Strategy 2018: 8 million of sales and an EBIT margin of ...
VW brand: the new Touareg to come up with the VW's first HEV version in 2010
Audi brand to launch new models in 3 vehicle lines such as entry premium A1 in 2010
US Market: A new plant to go stream with an annual production capacity of 150K
Emerging countries: VW has 2009 sales of 1.4 million in China, while new Russian and Indian...
VW to merge Porsche, while establishing a comprehensive alliance with Suzuki
2009 sales revenue and operating profit down 7.6% and 70.7%, respectively
Collaborative report with IHS Global Insight
Mid-term Production Forecast
The VW Group had record sales of 6.29 million in 2009, up by 1.1% over the previous year. The Group says that the sales growth is the result of the proactive releases of new model vehicles and environmentally-responsive vehicles, despite the shrinking global auto markets. The VW Group has refreshed the unit sales every year since 2005.
Sales expansion in emerging countries underpinned the VW's 2009 sales growth, including 1.4 million in China from 1.03 million in 2008, and increase in sales in Brazil. The sales were up from 1.06 million to 1.24 million in Germany, while sales were down from 3.759 million to 3.45 million throughout the European market.
The new Russian and Indian plants went live in 2009 with the total annual production of 250K. VW expects that the sales will be slightly up as well in 2010 by leveraging its high ground in these emerging markets.
In February 2010, VW unveiled the medium term targets in line with the Strategy 2018 (announced in 2007). The strategy sets the goal that VW will become an economic and environmental-responsive leader of the global automotive industry. VW will aim to sell 8 million in the medium term run, although it does not state when to achieve. The 2018 sales target is set at 10 million.
In the plan to market new model vehicles, VW will introduce the fully remodeled Touareg and the Sharan under the VW brand, and launch a new compact sedan, which is said a successor model of the Jetta Sedan. VW will create a hybrid version of the new Touareg as the Group's first HEV. VW will launch the up! in 2011, planning to launch the EV and HEV versions of the up! after 2013.
Audi Brand released new models in three vehicle lines in 2009. Audi will also launch new models in three vehicle lines in 2010. They will be the large sedan A7, the entry premium A1, and the open-top model R8 Spyder. Audi will fully remodel its flagship model A8. The Audi's first HEV will be realized in the Q5 within 2010, and the new A8 will also have the HEV version.
■VW refreshes its global sales record to 6.29 million vehicles in 2009
The VW Group refreshed its global sales record to 6.29 million vehicles except the Scania vehicles in 2009, up by 1.1% over the previous year. According to VW, its 2009 global share reached 11.4% from 10.3% in the previous year. The Group says the record global sales and market share growth are the results of its proactive introduction of new models and environmentally-responsive vehicles, despite the shrinking global passenger car market by 6%.
What it comes to the regional sales, VW had sales of 3.45 million in Europe, down by 8.0%, and 468K in North America down by 7.1%. It had sales of 1.55 million in Asia-Pacific region, up by 32.1% (1.4 million in China, up by 36.7%) and 816 K in South America, up by 2.2% (688K in Brazil, up by 8.7%).
VW expects that its 2010 business will continue to have a hard time with the global automotive markets with few strong signs of sustainable recovery. On the other hand, it expects some expansion in the sales by leveraging its high ground in growing Brazil and China markets.
|■VW Group's regional sales||(in 1,000 units)|
|Source: VW Press Release 2010.1.11|
|Note:||The data of South America include the data of South Africa up to 2007.
The data of South Africa after 2008 are included in those of Europe/Remaining Markets.
■Medium term targets in line with the Strategy 2018: 8 million of sales and an EBIT margin of 5% or greater
VW announced the Strategy 2018 in 2007. This business strategy sets the goal that VW will become an economic and environmental-responsive leader of the global auto industry. In February 2010, VW unveiled the medium-term targets in line with the long-term strategy. The VW Group aims for sales of 8 million and an EBIT margin of 5% or greater, although it does not state when to achieve.
■VW unveils medium-term targets in the Strategy 2018
|VW announced the Strategy 2018 in 2007, where it sets the goal at becoming an economic and environmental-responsive leader of the global auto industry. It unveiled the medium-term targets in line with the long-term strategy in February 2010, although VW did not state when to achieve.|
|In the medium term run, VW will work on expanding global market share, utilizing the modular toolkits, developing technologies and improving profitability. By 2018, it will establish the portfolio of a wide variety of brands and products, expand the markets by focusing on the BRICs, refurbish the sales networks, streamline the production, and improve engineering and product quality.|
|Medium-term targets||2018 targets|
|Group's unit sales||8 million||10 million|
|Automotive EBIT margin||5% or greater||8% or greater|
|Automotive CAPEX ratio||6%||6%|
|Automotive ROI||-||16% or greater|
|Source: VW Press Release 2010.2.2, Presentation Material 2010.2.3|
|Note:||The automotive EBIT margin does not reflect the effects from the merger with Porsche scheduled in 2011.|
|The VW Group will make an investment of 25.8 billion Euros in the automotive business from 2010 to 2012. Of the investment, 19.9 billion Euros will be spent for capital expenditures and 5.9 billion Euros for developments as asset capitalization. Out of 19.9 billion Euros, it will appropriate 13.3 billion Euros for the capital expenditure to update and expand the product range, and 6.6 billion Euros to develop sharable technologies among the group's products. The capital expenditure over sales is expected to reach average about 6% during the three years.|
■VW Group achieves a CO2 emission of 140 g/km or less as of the beginning of 2010
|The VW Group has achieved a CO2 emission of 140 g/km for the model variants of the 176 as of the beginning of 2010. This was achieved by maximizing the powertrain including the TDI (Turbo Diesel Engine) and the TSI, the direct injection engine combined with the supercharger plus the turbocharger, the newly developed dual-clutch transmission (the DSG or S-tronic dubbed by Audi), and the idling-stop mechanism. Lowering mechanical resistance, expanding the application of the light structure and maximizing the aerodynamics contribute to lowering the CO2 emission as well. For the information, the vehicles sold by the VW Group in EU27 countries in 2008 emitted CO2 at a rate of 159 g/km in average.|
■VW brand: the new Touareg to come up with the VW's first HEV version in 2010
VW Passenger Car fully remodeled the compact car Polo and the light pickup truck Saveiro for South America in 2009.
The medium SUV Touareg and the heavy MPV Sharan will be fully remodeled. The new compact sedan, which is said a successor of the Jetta sedan, will be launched in 2010.
For the environmental-responsiveness, VW will create its first HEV in the new Touareg. The up!, a microcar will be released in 2011. VW will also create the EV and the EHV versions of the microcar in 2013.
■Outline of 2009 - 2013 model plans for VW brand passenger cars
Note: the models in blue are new models, and others are fully-remodeled.
|New Polo||Jun. 2009||The new Polo is the fifth generation of the 5-door compact hatchback. It is lighter by 7.5% and has less fuel consumption. For the new Polo VW adopted 1.2-liter straight 3, 1.4-L straight 4, and 1.2-liter straight 4 turbo gasoline engines, and 1.6-L straight 4 direct injection turbo diesel engines (1.6 TDI). The Blue Motion version 1.6 TDI has a fuel consumption of 26.3 km/L and a CO2 emission of 96 g/km.|
|New Saveiro||Aug. 2009||The new Saveiro is the fifth generation of the light pickup truck for the South American markets. It was developed on the compact GOL, a South American exclusive model. It is equipped with a 1.6-liter straight 4 engine capable of running on the gasoline and ethanol.|
|New Touareg||Apr. 2010||The new Touareg is a medium premium SUV. It is 40 mm-longer and 10 mm-wider than the old model, while the vehicle weight is lighter by 208 kg. As a result, the fuel consumption is improved by about 20%. The VW's first HEV is equipped with a supercharged 3.0-liter V6 direct injection gasoline engine, the idling stop mechanism and the regeneration brake and realizes a fuel consumption of 12.2km/L. The clean diesel version equipped with a 3.0L V6 turbo diesel engine realizes a fuel consumption of 13.5 km/L.|
|New Sharan||2010||The new Sharan is a heavy-duty MPV. It was developed with Ford in 1990, sharing the platform with the Ford Galaxy/SEAT Alhambra. For the new model, VW will employ the platform for the medium Passat/Golf.|
|New compact sedan||2010||The new compact sedan is said a successor of the C-segment Jetta sedan. Although new compact sedan is slightly larger than the Jetta, the price will be set competitive against the Toyota Corolla and the Honda Civic. The new compact sedan is one of the strategy vehicles to achieve sales of 800K VW brand vehicles in the US by 2018.|
|New Passat||2011||The new Passat is a medium sedan. It will be slightly larger than the current model, and equipped with advanced systems for higher class markets. Its rivals are BMW 3 Series and the Audi A4.|
|up!||2011||The up! is the collective name of the New Small Family consisting of its several model variants. VW will launch the 3-door hatchback at a price of about 8,500 Euros in Europe. It plans to launch the model in different vehicle types in the emerging markets such as India, etc. after the launch in Europe. The targeted total annual sales are 500K or more.|
|Mid-sized sedan||Spring 2011||The mid-sized sedan is an exclusive model for the US market. It is larger than the CC and the Passat to be priced at about 20,000 dollars and greater. The competitors are the Honda Accord and Toyota Camry. The mid-sized sedan will be manufactured at the new plant in Tennessee to sell it within the US market. VW plans to employ the clean diesel engine for the sedan.|
|Mid-engine roadster||Around 2011||The mid-engine roadster is a two-seat convertible car. It will add a sporty aspect to the VW's conservative brand image. The car size is similar to the Mazda MX-5. It will have a mid-engine layout with a rear drive system. VW plans to release the roadster in the US in 2013.|
|E-Up!||2013||The E-Up! is an EV version UP!. VW plans to launch it in the US in 2013. It carries three adults and one child. It will be equipped with a motor generating a maximum power of 60 kW and a maximum torque of 21.4 kg-m, and a Li-ion battery of a capacity of 18 kWh. It scoots from zero to 100 km in 11.3 seconds. It travels at a top speed of 135 km/h and the fully-charged battery lasts 135 km. It takes five hours to fully charge the battery with the household wall socket of 230 V, and one hour with the quick charger to 80% charge.|
|Up! Lite||To be
|The Up! Lite is a hybrid version Up!. VW plans to launch it in the US in 2014. The HEV is a 4-seat 3-door hatchback. It is equipped with a 0.8-L 2-cylindar turbo diesel engine, a motor, a 7-speed DSG (Dual Clutch Transmission) and a Li-ion battery. It weighs 695 kg. The total output is 65 ps; acceleration from zero to 100 km takes 12.5 seconds, and it cruises comfortably at a top speed of 160 km/h, and a range of over 800 km travel is promising from the fully charged fuel tank. A travel of 2 km is possible in electric driving. The fuel consumption is 40.98 km/L.|
|L1||2013||The L1 is a diesel hybrid car concept presented in September 2009. It is a compact 2-seater. The car body is built mostly from carbon fiber reinforced plastic, and the car weighs 380 kg. It is equipped with a two-cylinder turbo diesel engine, a motor, a 7-speed DSG, and a Li-ion battery. It scoots from zero to 100 km within 14.3 seconds, cruises comfortably at a top speed of 160 km/h, and a range of 670 km travel is possible with the fully charged fuel tank. The fuel consumption is 72.46 km/L.|
|Source:||VW Presentation Material 2010.2.3, Automotive News 2009.10.5,
Automotive News Europe 2010.2.11/2010.2.21
■Audi brand to launch new models in 3 vehicle lines such as entry premium A1 in 2010
Audi brand launched the new models in three vehicle lines of the convertible model A5 Cabriolet, the coupe A5 Sportback with an excellent utility and the crossover A4 in 2009.
In 2010, Audi will also release new models in three vehicle lines of the large sedan A7, entry premium A1 and the convertible model R8 Spyder. In addition, it will fully remodel the flagship model A8.
As for the environmental responsiveness, Audi plans to create its first HEV version in the medium SUV Q5 plus the new A8. Audi used the e-tron as the collective name for electric concept cars. It has decided to use it as the sub-brand name for electric vehicles. It plans to launch a few vehicle lines with the e-tron badge after 2012.
■Overview of 2009 - 2010 model plans for Audi brand passenger cars
Note: the models in blue are new models, and others are fully-remodeled.
|A5 Cabriolet||Spring 2009||The A5 Cabriolet is a successor of the A4 Cabriolet, a 4-seat convertible model. Its rooftop is electrically-retractable and made from a soft fabric.|
|A4 Allroad Quatro||Summer
|The A4 Allroad Quatro is a new crossover model with higher off-road cruise performance. It has three engine versions, i.e. a 2-liter 4-straight turbo gasoline engine, a 2-liter 4-straight and 3-liter V6 turbo diesel engines. Either of them is combined with a 6-speed MT or a 7-speed S tronic (dual clutch transmission).|
|A5 Sportback||Fall 2009||The A5 Sportback is a new model of a 5-door coupe. Audi says that it realizes both elegant style and high utility by harmonizing the sedan, coupe and wagon.|
|A7 sedan||2010||The A7 sedan is a coupe style large 4-door sedan. It competes against the M-Benz CLS. Audi plans to create a convertible version A7. Aiming for annual sales of 40,000, Audi will sell the A7 sedan mostly in the US. It is planned to launch the high-end S7 in a few months after the launch of the A7, and the RS7 equipped with a 5.2-liter V10 engine in 2012 to 2013.|
|A1||May 2010||The A1 is a 3-door hatchback version premium subcompact. It competes against the BMW Mini. The entry model price will be 16,000 Euros cheaper than the price of the Mini (16,600 Euros). The A1 focuses on the young who seek a more modern style than the retro-flavored Mini. Audi will aim for annual sales of 80K. It will not be launched in the US in the immediate future.|
|New A8||Early 2010||The new A8 is a large sedan version of the Audi's flagship model. An aluminum alloy body is employed to lighten the vehicle weight. In the initial sales phase, it will combine the 4.2-liter V8 gasoline or diesel engine or 3.0-liter V6 diesel engine with the 8-speed AT. In the US, it is planned to launch the HEV A8.|
|R8 Spyder||2010||The R8 Spyder is a convertible coupe type sporty car R8. It will be equipped with a 5.2-liter V10 engine which generates a maximum power of 525 hp, a maximum torque of 54.1 kg-m. It will take 4.1 seconds to accelerate from zero to 100 km. A top speed of 313 km/h is promising.|
|Q3||2011||The Q3 is a light SUV, which uses the same platform as that of A4 and A5.|
|Q5 hybrid||2011||The Q5 Hybrid will be the Audi's first full HEV. It will be equipped with the Li-ion battery developed with Sanyo Electric. It will be launched in the US and in Japan later.|
|Audi will use the e-tron for the sub-brand name of electric vehicles. It plans to launch the models wearing the e-tron badge in a few vehicle lines.|
|The first vehicle line is based on the electric sports car concept (the base of the concept car is the R8), which was exhibited in the 2009 Frankfurt Motor Show. It has four in-line motors to drive respective four wheels. Audi will start the production with 100 and expand the production to 1,000 at most.|
|The second vehicle type is expected to be based on the compact sports car concept, which was exhibited in the 2010 Detroit Auto Show. The vehicle body size is close to the TT.|
|Source:||VW Presentation Material 2010.2.3,
Automotive News 2010.2.15, Automotive News Europe 2010.2.21
■US Market: A new plant to go stream with an annual production capacity of 150K
In the US Market, the VW Group had 2009 sales of 296K, down by 4.7%. Of them, sales of VW brand vehicles and Audi brand vehicles were 213K, down by 4.4%, and 83K, down by 5.8%, respectively.
The VW Group sets the US sales target at one million by 2018 in the Strategy 2018, its business project. The targeted number consists of 800K VW brand and 200K Audi brand cars. According to the strategy, the Group runs the plans to launch North American exclusive models and expands the production capacity in North America. In 2011, its new US plant will go live with an annual production capacity of 150K.
■VW to start operation of the new US plant in 2011, while expanding the annual production of the Mexico Plant to 525 K
|VW is building a new plant in Chattanooga, Tennessee, US. The plant will start operation in 2011. It will have an initial annual production capacity of 150K. The plant will have the car body, painting and assembling shops. VW will spend total about 620 million Euros to build these plant buildings. The new US plant will start the production with the US specific mid-sized sedan.|
|VW will expand the annual production capacity of the Puebla Plant from 450K to 525K in 2010 to produce the new compact sedan, which is said a successor model of the Jetta. The Puebla plant is producing the Jetta, New Beetle/Convertible and Golf Variant.|
|■VW Groups new vehicle sales in the US||(units)|
|Source: Ward's Automotive Yearbook, Ward's Automotive Reports 2008.12.10|
|Notes: 1.||The 2009 VW brand passenger car sales are as follows: 108,427 of the Jetta (97,461 last year), 11,138 of the Passat (30,034), 6,470 of the Rabbit (20,070), 23,872 of the CC (2,105), 9,581 of the Beetle (15,520), 7,932 of the GTI (12,232), 4,504 of the Beetle Cabrio (10,957), 7,204 of the EOS (12,837) and 1,350 of the other models (3,106).|
|2.||The 2009 Audi brand passenger car sales are as follows: 3,874 of the A3 (4,759), 31,461 of the A4 (36,930), 4,501 of the A4 Cabrio (4,709), 6,485 of the A5 (4,120), 6,606 of the A6 (11,406), 1,935 of the TT (4,486) and 6,405 of others (8,142)|
|3.||The 2009 VW brand light truck sales are as follows: 4,392 of the Touareg (6,755), 13,903 of the Tiguan (8,664) and 14,681 of the Routan (3,387)|
|4.||The 2009 Audi brand light truck sales are as follows: 13,790 of the Q5 (zero) and 7,299 of the Q7 (13,209)|
■Emerging countries: VW has 2009 sales of 1.4 million in China, while new Russian and Indian plants start operation
The VW Group's business expanded in the emerging markets in 2009 as well. The Group expects a sales growth by 10 to 15% in 2010 following the new vehicle sales of 1.4 million in China. One more Audi's Changchun Assembling Plant was built in 2009. VW will expand the production capacities of the Nanjing and Chengdu plants in 2010 to 2012.
VW plans to expand the production capacities of the plants in Brazil from 2009 to 2014, including the engine plant. In Russia, the new Kaluga Plant has been in full production to its maximum annual capacity of 150K since October 2009. In India, the new Pune plant with an annual production capacity of 110K has been in operation since May 2009.
■VW's business in BRICs markets
|Best selling models
|Market's average growth per year
(2009 - 2012)
|Source: VW Presentation Material 2010.2.3|
|Notes: 1.||The data show the sales of passenger cars and compact commercial vehicles. VW's sales do not include the data of heavy-duty commercial vehicles and the Scania|
|2.||The unit sales in China are the total sales of two joint ventures. The VW Group takes a 40% stake in SAW-VW and 50% in SVW.|
|3.||The unit sales of Suzuki in India are the sales of Maruti Suzuki. The VW Group takes a 19.9% stake in Suzuki, and Suzuki takes a 54% stake in Maruti Suzuki.|
■VW has 2009 sales of 1.4 million vehicles in China, while investing more than 4 billion Euros in 2010 to 2012
|The VW Group had 2009 sales of 1.4 million vehicles in China (including Hong Kong). The 2008 sales were 1.02 million. Thanks to brisk sales of the VW Golf, VW Passat, New LIngyu, Audi Q5, Skoda Superb, VW brand sales were up by 32.4% over the previous year to 1.12 million, Audi brand up by 32.9% to 160K and Scoda brand by 106.7% to 120K.|
|In 2010, VW will launch seven vehicle lines to be produced in China, such as VW Golf GTI and Tiguan. It will produce 7-speed DSG transmissions in Dalian. VW expects that the 2010 sales in China will be up by 10 to 15% over the previous year.|
|In addition, VW will invest 4 billion Euros in the China market for the next 3 years from 2010 to 2012 to expand the respective production capacities of the Nanjing and the Chengdu plants, planning to launch 20 products including new models and new vehicle lines. The VW Group says that it will be able to achieve the sales of 2 million in China, the target in the Strategy 2018, earlier than the schedule.|
|In September 2009, Audi started the operation of the new Audi vehicle assembling plant which belongs to FAW-VW in Changchun, built by spending about 100 million Euros. The plant has been assembling the A4L, the long-wheel base version of the A4, and the Q5. Audi had 2009 sales of 160K. The figure is way out the sales target. Eventually, VW maintains the top ranking in the premium segment in the Chinese market. The sales of the A6L, a long-wheel base version of the A6, exceeded 100K.|
■VW to invest 2.3 billion Euros in Brazilian business from 2009 - 2014 to expand production capacity and develop new models
|In Brazil, the VW Group sold 688K in 2009, up by 8.7% over the previous year, and produced about 800K. It will invest 2.3 billion Euros in the period from 2009 to 2014 to develop new models, and expand the Anchieta and the Taubate Plants, and the Sao Carlos Engine Plant. The Group plans to launch 26 new products of redesigned models and new vehicle lines from 2009 to 2010|
■VW starts full production at the new Russian plant, planning to produce 150K in 2010
|VW and Skoda started full production of the VW Tiguan and the Skoda Octavia, respectively, at the new Russian Kaluga Plant completed in November 2008 from October 2009. It is 11-month earlier than the plan. The plant plans to produce total 150K of both brands. The VW Group spent 970 million Euros for opening the new plant and development of new products.|
■India: VW Gr. starts operation of the new Pune plant with an annual production capacity of 110K
|The new Pune Plant was built in the western part of India in March 2009, for which 580 million Euros were spent. The plant has produced the Skoda Fabia since May 2009. It will start production of the India specific VW Polo hatchback in 2010. The plant is able to produce 110K at its full capacity.|
■VW to merge Porsche, while establishing a comprehensive alliance with Suzuki
VW and Porsche signed the Merger Agreement with respect to merging both operations led by VW in November 2009. VW will take a stake in Porsche in a phase-in manner, planning to integrate the Porsche SE, a holding company, in 2011.
In December 2009, VW and Suzuki agreed to establish the comprehensive alliance. Both companies plan to cooperate in the areas of environmentally-responsive vehicles and emerging markets.
■VW to take a stake in a phase-in manner and merge Porsche in 2011
|The board of auditors of VW and Porsche officially approved the comprehensive agreement with respect to the merger of both companies led by VW in August 2009. VW and Porsche SE, a holding company, signed the agreement to implement the comprehensive agreement in November 2009. VW acquires a 49.9% stake in Porsche AG, an automobile business, for 3.9 billion Euros.|
|VW will issue 135 million preference stocks in the first half of 2010 to raise funds to acquire Porsche's equity. This has been approved by the extraordinary shareholders meeting in December 2009.|
|The VW will take over Porsche Holding Salzburg (an automobile trade company) in 2011. The business is worth 3.55 billion Euros. Porsche SE will issue ordinary and preference stocks within 2011 to increase its stake in the sales company (the Porsche's founder family will spend the most part of the income from selling Porsche Holding Salzburg to acquire these ordinary and preference stocks).|
|Following the merger of VW and Porsche SE in 2011, Porsche will be the 10th brand of VW eventually. The shareholders of VW are expected to be as follows: the Porsche founder family will be the largest shareholder, Land Niedersachsen the second largest, and Qatar the third largest. After the entry into the comprehensive agreement in August 2009, Porsche sold the majority of VW stock options to Qatar.|
|VW expects that the operating profit will be up by about 700 million Euros through the merger with Porsche in a long-term perspective. If the merger will not take place by 2014, put/call option as a fall-back solution will be exercised.|
|Source: VW Presentation Material 2010.2.3|
|Note:||Porsche increased its stake in VW to 50.76% in January 2009. In the process of this increase, Porsche faced the significant increase in the liability and had the cash-flow problem. VW made the buy-out offer to Porsche.|
■VW and Suzuki basically agree to the comprehensive alliance
|VW and Suzuki basically agree to establish a long-term comprehensive alliance in December 2009. VW became the largest shareholder by obtaining 19.9% of Suzuki's issued shares in January 2010. To acquire a stake in VW Suzuki will spend at most a half of the income on the stock sales to VW. Both companies plan to cooperate in the development and production of environmentally-responsive vehicles and responding to rapidly emerging markets.|
■2009 sales revenue and operating profit down 7.6% and 70.7%, respectively
Although the VW Group saw a slight year-on-year increase in the sales in 2009, its sales revenue and operating profit decreased, down by 7.6% to 105.2 billion Euros and by 70.7% to 1.8 billion Euros, respectively. These sluggish results came partly from the sales shift to the compact car segment in European markets.
The VW Group expects that its sales revenue and operating profit for 2010 will exceed the prior year results although interest and exchange rate fluctuation will remain a drag on profit.
|■VW Group's consolidated business results||(in millions of Euro)|
|Sales unit (1,000 units)
|Profit before tax
Profit after tax
|Source: VW Annual Report 2008, Press Release 2010.2.26|
|Note:||The sales are on a wholesale basis. As to the business of the Chinese joint venture, sales and production are included in the above, while they are excluded from the sales in Euro and operating profit because of the consolidated result under the equity method.|
The following are the VW Group's sales by brand in the January-September period of 2009. The VW Passenger Car had increase in sales of the new Scirocco and the Passat CC, while its total sales were down by 9.9%. Suffering from the shift to compact cars, sales in Euro were down by 14.9% and operating profit dropped to 335 million Euros from 1,889 million Euros from the same period of last year.
Audi enjoyed brisk sales of the A5 and A3 Sportback as well as the new model Q5, but the total sales were down by 12.2%. The sales in Euro were down by 15.9% and the operating profit was down to 1,172 million Euros from 2,059 million Euros in the same period of last year.
Sales of the Skoda's Fabia and Superb were increasing and the new model Yeti were selling well, while the total sales were down by 18.8% and the sales in Euro was down by 18.8%. Suffering from the high Czech Koruna, the operating profit dropped to 162 million Euros from 455 million Euros in the same period of last year.
SEAT had increase in sales of the Exeo and Ibiza, while sales were down by 19.2% due to the considerable contract of the Spanish passenger car market. Sales in Euro were down by 17.0%, and accordingly, the operating loss expanded to 228 million Euros from 30 million Euros in the same period of last year.
The VW Commercial Vehicle sold the heavy-duty commercial vehicle business in Brazil to the MAN Group in 1st quarter of 2009. Its unit sales and sales in Euro were down by 41.5% and 48.2%, respectively.
Scania sold 30K in the January-September period of 2009, and posted sales of 4.5 billion Euros and an operating profit of 98 million Euros. Scania made a good move by shortening work hours and rescheduling the investment against the shrinking commercial vehicle markets.
|■VW Group: Automotive business results by brand||(in millions of Euro)|
|Source: VW Annual Report 2008, Interim Report Q3 2009|
|Notes: 1.||The sales are in 1,000 on a wholesale basis. VW represents VW passenger cars. CV stands for Commercial Vehicles. China represents the China business. Others show the figures in which the inter-group company deals were adjusted.|
|2.||VW raised its voting power in Scania to 68.08% in July 2008 to include it in the consolidated statement. The figures of Scania are the results since July 22, 2008.|
|3.||The VW Group's automotive business consists of Volkswagen Passenger Cars, Audi, Skoda, SEAT, Bentley, Volkswagen Commercial Vehicles and Scania. In early 2007, the VW group resolved the old Volkswagen brand group and the Audi brand group. As a result, each brand is considered as an independent business. The VW Group has the Financial Service beside the automotive business.|
|4.||The profits of the Chinese joint ventures on the equity method were 294 million Euros in 2007, 295 million Euros in 2008 and 525 million Euros in the period of January-September 2009 from 250 million Euros in the same period of last year.|
|VW Group: Light vehicle production by Country (IHS Global InsightForecast)||(Unit)|
|BOSNIA AND HERZEGOVINA||VW||1,100||0||0||0||0||0||0||0|
1. Data indicate figures of only small-size vehicles, including passenger cars and light commercial vehicles with a gross vehicle weight of under 6 tons.
2. Data for 2009 are based on actual production results, in countries other than the South Africa.
3. All rights reserved. Reproduction of any data will require permission of IHS Global Insight.
IHS Global Insight Report
(01 Mar 2010) - World: VW Posts 80.6% Y/Y Decline in Net Profit
VW posted a significant decline in profit in 2009 due to currency effects and a lower-value model mix, but its financial performance remained robust.IHS Global Insight Perspective
|Significance||Volkswagen (VW) has posted a much reduced net profit of 911 million euro for 2009, an 80.6 % year on year reduction on the previous year's results because of the difficult global business environment.|
|Implications||However, the very fact that VW remained very much in the black in 2009 was impressive in itself, and it joins Ford and Hyundai as the OEMs that have performed the best throughout the global economic downturn.|
|Outlook||The company's 2009 financial performance once more endorses VW as being one of the bestpositioned global OEMs in terms of its ability to weather the current economic environment. However, it must continue to eradicate regional weaknesses in the United States and Asia.|
The Volkswagen (VW) Group has posted an 80.6% year-on-year (y/y) decline in its net profit during the full 2009 calendar year to 911 million euro, down from the figure of 4.688 billion euro the year before, according to a company press release. As would be expected, there was also a corresponding decline in operating profit, which fell by 70.7% y/y to 1.855 billion euro in comparison to the figure of 6.333 billion euro in 2008. Profit before tax declined in line with the decrease of net profit, with a fall of 80.9% y/y to 1.261 billion euro. These results were achieved off the back of a 7.6% y/y decline in sales revenue to 105.187 billion euro in comparison to the figure of 113.808 billion euro which was achieved in 2008 before the very worst effects of the global credit crisis fully took hold. Commenting on the group's headline numbers, CEO Martin Winterkorn said, "The Volkswagen Group successfully mastered the difficult situation in the automotive industry last year. That is convincing proof of the strength of our multibrand group." However, while he emphasised the solid financial foundations of the VW Group following this latest set of results, Winterkorn also warned investors that the company did not expect a rapid marked improvement in business conditions during 2010. "Our success is founded on our attractive, innovative and efficient vehicles. We also have a very solid financial position and our liquidity remains high. Under these circumstances, we will once again be able to systematically expand our position on world markets during the current year. We have good grounds for approaching this year with confidence. Conditions will, however, remain very difficult."Volkswagen Group 2009 Full Year Financial Results (Euro, bil.)
However, the group revenue decline rather belies the 2009 sales data that VW has previously published where it managed to actually post a small 1.3% y/y improvement in sales volume to 6.336 million units, in comparison to 6.257 million units in 2008. This was a hugely impressive sales performance given the prevailing conditions in the global automotive market. However, the lower outright revenue figure suggests increased sales of models in the lower vehicle segments and lower price points, something that would be borne out by the launch of the new VW Polo and strong sales of its close relation the Skoda Fabia throughout the year as a result of various European scrappage schemes. Winterkorn also mentioned the company's strong liquidity levels, stating that VW has 10.6 billion euro in cash reserves, comfortably exceeding the prior-year figure of 8 billion euro. VW also stated that it recorded positive net cash flow during the year despite the acquisition of its 49.9% stake in Porsche.
Outlook and Implications
VW appears to have disappointed some investors, especially with lower-than-expected profitability figures during the fourth quarter. Deducting the financial results for the first nine months of the year indicated that VW made an operating profit in the fourth quarter of 337 million euro and an operating margin of just 1.2%. However, it has also been clever in managing expectations about its financial performance during 2009 and 2010.VW will maintain dividend payments to shareholders this year, but it has opted against providing concrete expectations of financial performance this year, which is a shrewd strategy given the ongoing uncertainty surrounding the global economy. The company is planning a capital increase this year by issuing up to 135 million new preference shares, in order to acquire the Porsche brand of sports cars and the Porsche Holding dealership group which are worth a combined 16 billion euro in equity and debt, something that has improved extremely unpopular with some institutional investors (see Germany: 17 November 2009: VW and Porsche Criticised Again Over Shareholder Transparency; Contract to Be Agreed). As a result, VW is trying to placate these investors by paying dividends while at the same not setting concrete targets of 2010 performance, which can be easily underperformed. In its press release, the VW Group made a relatively open-ended statement regarding 2010 financial performance. It stated "The Group's sales revenue and operating profit for 2010 are expected to exceed the prior-year figures despite a shift in volumes between the markets. Interest and exchange rate volatility will remain a drag on profit." Sales performance has been very strong in 2009, but this has not quite been matched in terms of profitability as a result of currency effects and a lower value sales mix. As a result of the significantly lower profits recorded for 2009, VW has proposed cutting its dividend by 17% to 1.66 euro per preferred share.
VW is looking to continue its strategy of addressing its susceptibility to currency effects by increasing the regionalisation of its production footprint, forging ahead with plans to re-establish a production base in North America. Work on the new factory in Chattanooga is well advanced and production is on schedule to begin early next year. Meanwhile VW's acquisition of a 19.9% stake in Suzuki gives it an entry into geographical areas of the Asian market and access to minivehicle technology that will substantially enhance its global strategy. VW will now look to consolidate its relatively robust 2009 financial results by continuing with its Strategy 2018 plan, which includes a stated goal to overtake Toyota as the world's number one volume carmaker by 2018. VW will no doubt have been encouraged in this regard by the immense amount of negative publicity that has surrounded the Toyota brand recently as a result of the global vehicle recall involving floor mats and sticking accelerator pedals that have led to reports of accidents related to unintended acceleration, particularly in the United States.
(10 Mar 2010) - Germany: Audi Records 38.9% Decline in Net Profit, Vows to Return to Pre-Crisis Sales Levels
Audi has reported a decline in profitability as sales stall, but has vowed to get the business back to pre-crisis levels in the short term.
|Significance||Audi has seen profits tumble as demand for its vehicles slid during 2009.|
|Implications||Despite the pressures from the economic downturn, Audi seems to have survived this period better than some.|
|Outlook||While pressures have abated, there still remain some uncertainties in 2010, although it is expected that Audi will see sales of over 1 million units during the year, helped along again by its presence in the Chinese market.|
The Volkswagen (VW) Group's Audi unit has seen a decline in profitability during 2009, a year in which it suffered a slide in sales as a result of the global economic downturn. According to a statement, the company saw revenues of 29.8 billion euro (US$40.5 billion), a decline of 12.7% year-on-year (y/y) as unit sales slipped by 5.4% y/y to 949,729 vehicles, although Audi said it was also hit by the effects of currency translations. Profitability also fell markedly over that seen in 2008, with operating profits falling by 42.1% y/y to 1.6 billion euro, while net earnings retreated by 38.9% y/y to 1.35 billion euro. Despite the difficult situation, return on investment was 11.5%, down from 19.8%, and return on sales before tax fell from 9.3% to just 6.5%. Audi added that it had also achieved a free cash flow of 2.3 billion euro, which outstripped last year's figures, while net liquidity climbed 14.8% to 10.7 billion euro. Chairman of the Board of Audi Rupert Stadler said that "This good result in a very difficult environment paves the way for our future success," adding, "Our policy of consistently improving our productivity and investing massively in the typical Audi values of design, sportiness, quality and efficiency over the past few years is now paying dividends,"
Despite the contraction in its financial performance during the downturn, the automaker revealed that it was again aiming to share profit with its staff, averaging 2,300 euro. The company added that this would be joined by a further special one-off payment averaging 1,200 euro for each member of staff to acknowledge "the exceptional performance of our employees in a crisis-ridden 2009" said Dr. Werner Widuckel, member of the automaker's board of management for human resources.
For 2010, following an announcement that sales had increased by 28.7% y/y during the first two months of the year (see World: 9 March 2010: Audi Closes Gap on Rivals in February Sales; China to Overtake Germany as Biggest Market), Stadler said that the brand was well on course to surpass the 1-million-unit target level. He said, "We aim to start growing again through new models and have set ourselves the target for 2010 of bettering the revenue and operating profit of 2009." However, the senior executive warned "The worst of the crisis appears to be behind us, but we are not yet able to give the all-clear for 2010 - We need to remain vigilant so that we can respond swiftly and flexibly to any difficulties."
Outlook and Implications
Last year was a difficult time for the automotive industry with the economic downturn and the effect that this has had on sales. However, it was arguably worse for those at the premium end of the market, which were not able to benefit from many of the schemes that have helped support market demand, particularly in Europe. Audi has reflected this during the year, while its domestic sales fell by 11.3%, despite the market soaring on the back of the scrapping incentive scheme. However, from a market perspective, the situation would have been far worse were it not for China, where sales rose by almost one-third to over 150,000 units during the year, as the country shrugged off the worst effects of the global pressures. Also, with regards to Audi's exposure to the most pressured of markets, the company successfully took steps to protect its financial position during the year by scaling back protection to stay on top of inventory levels and reduce the effect that this had on its liquidity situation.
Going forward, Audi has already announced that it is planning another round of investments over the next two to three years, aimed at both research and development (R&D) and its production operations (see Germany: 29 December 2009: Audi Confirms Plans to Invest 7.3 bil. Euro in R&D, Plant Investment by 2012). According to a statement made late in 2009, the company has set aside 5.9 billion euro to develop new products and technologies, including the expansion of its range from 34 vehicles to 42 vehicles by 2015, at which point it aims to become the world largest selling premium vehicle brand. This expansion has already been taking place for several years now, with the introduction of two sport utility vehicles (SUVs) in the Q5 and Q7, a coupe in the A5 and a sports car in the shape of the R8, as well as the creation of new niche models such as the A5 Sportback. However, this will be taken up a gear in 2010 with the launch of the A1, the automaker's second attempt on the premium end of the B segment since the ill-starred A2 which was killed off in 2005. This model will aim at this increasingly popular segment, and is hoped to become as popular as BMW's own Mini. With the relatively low entry price and its positioning in what is a relatively new segment, Audi is hoping that 80% of customers will be new to the brand, which would provide an excellent feeder into its larger models.
However, while this will go some way towards helping the brand, alongside the latest generation A8 and other new models in the pipeline for 2010, this year could well be as difficult due to the global economy, which is still under some pressure. Certainly, the early signs are good, but this is partly due to the low baseline effect from last year. Audi has already been forced to reduce production of its A3 model for a week at its Ingolstadt (Germany) plant, and it was be unsurprising if this were to take place again. However, IHS Global Insight agrees with Audi and believes that its sales will reach 1.04 million units in 2010, with the majority of its top markets either stabilising or gaining during the year. Again, it will be China that is expected to drive sales, which are now expected to climb to around 195,000 units during the year, with additional support being brought by the new A1.
(17 Mar 2010) - World: Porsche SE's Net Profit Declines 84% in H1 FY 2009/10
Special items once more dominate Porsche SE's first-half financial year results, with VW's capital increase set to have a sizeable negative effect on the company's full-year figures.
|Significance||Porsche has posted a net profit of 871 million euro for the first half of the of its financial year, an 84% y/y decline.|
|Implications||The failed takeover of VW and the subsequent effective reverse takeover means that this result is mainly governed by accounting effects and has little to do with overall business performance. However, there are signs that the surrounding business environment may be improving marginally for Porsche with an operating profit of 329 million euro, during the period while revenue rose by 3.7% to 3.16 billion euro.|
|Outlook||In the remainder of the financial year Porsche is expecting its net profit to be reduced by a number of external factors, not least that it is not participating in the capital increase planned by VW for the first half of 2010. Porsche SE's remaining share capital in VW will be diluted and the company's results will also be influenced by the number of new preference shares in VW issued and their issue price.|
Porsche Automobil Holding SE, the company that controls the sports car company Porsche AG and which was previously being used as the vehicle for the company's takeover attempt of the Volkswagen (VW) Group, posted an 84% year-on-year (y/y) decline in net profit to 871 million euro during the first half of the company's financial year (FY) from 1 August 2009 to 31 January 2010. However, this large decline in net profit had more to do with accounting effects than the actual operating performance following the after-effects of the failed attempt to acquire and maintain a controlling stake in Europe's largest passenger carmaker. Porsche said in a press release that it still expects negative earnings before tax for the full FY as a result of accounting effects, although some of these effects will offset each other. One of the main influences on Porsche SE's full-year financial results will be the deconsolidation of the VW Group from Porsche SE which occurred on December 2009 and the deconsolidation of the Porsche Zwischenholding GmbH group, which mainly comprises the carmaking side of the business Porsche AG. These structural changes have already been included in Porsche SE's six-month report. With Porsche now on its way to becoming fully consolidated within the VW Group by 2011, the company has sold a 49.9% stake in Porsche Zwischenholding GmbH to VW. As a result, the holding company Porsche SE received a figure of 3.9 billion euro which has already mainly been used to pay off debt, with Porsche's SE's net debt now having been reduced to 6.1 billion euro.Porsche SE H1 FY 2009/10 Financial Results (Euro, mil.)
|H1 2009||H1 2010|
However, on the operating side of the business, which again mainly comprises Porsche AG's activities, the company did actually report some positive results. Porsche AG posted an operating profit during the period of 329 million euro, which translated to an operating margin of 10.4%. The unit's revenue also saw a positive increase of 3.7% y/y with sales rising to 3.16 billion euro. However, this was in spite of unit sales declining further still during the period to 33,670 units, suggesting a higher value model mix during the period in question. This was probably the result of this is period corresponding with the launch of the Panamera sports sedan. The Panamera sold 8,326 units between its launch in September 2009 and the end of the reporting period on 31 January. The Cayenne remained Porsche's best selling model with 13,454 units sold, representing a 19.8% y/y decline on the period during the previous year. Unit sales of the 911 came to 7,493 units (down 44.7%). Unit sales of vehicles from the Boxster model series, including the Cayman models, recorded 11.3% growth to 4,397 vehicles. Porsche stated that it continues to assume that unit sales for the full fiscal year 2009/10 will exceed the prior year figure of 75,238 vehicles.
Outlook and Implications
As has been the case in recent years, Porsche Automobil Holding SE's results are, it seems, only marginally affected by its actual core business, the sports car company known as Porsche AG. Instead these latest first-half results from Porsche's own unique FY reporting period have been massively influenced by the machinations surrounding the company's failed attempts to take control of Europe's largest carmaker, VW. In the past, Porsche SE has posted massive net profit gains as a result of the rise in value of its VW shares and share options. Likewise when its takeover attempt went bad and it had to sell off options at less than their face value, the company posted big write-downs. These external factors will again play a sizeable part in Porsche SE's full 2009/2010 FY results. As Porsche said in its statement "Porsche SE is expected to be reduced by various factors in the second half of the 2009/10 fiscal year because it is not participating in the capital increase planned by Volkswagen AG for the first half of 2010." VW will issue up to 135 million preference shares to help finance the acquisition of a 49.9% stake in Porsche SE and the 19.9% stake that the company is planning to acquire in Suzuki. This will result in a dilution of Porsche SE's share in capital of VW, with Porsche going to state that "the impact on earnings will depend on the form that the capital increase takes and will also be influenced by the number of new preference shares in Volkswagen issued and their issue price." As yet, it is difficult to fully estimate the impact this will have on Porsche although the company is forecasting that the loss for the 2009/10 fiscal year will be in the low single-digit billion-euro figure. Eventually following the full consolidation in 2011, Porsche AG and SE's sales performance and financial data will be consolidated in the results of the VW Group and the company's results will align with VW's reporting period, which corresponds with the calendar year.