VW Group (Part 2): Solid Performance Despite Sales Volume Decline

Launching ICE models including pickup truck developed with Ford and China-only SUV

2022/11/10

Summary

  In its new model launch plan, Volkswagen AG (VW Group) will release and update various ICE models across a wide range of segments and body types while it continues to expand its lineup of EVs and PHVs systematically. As for the premium segment, Audi plans to launch the new A4 midsize sedan and the new Q5 midsize crossover SUV in 2023. In high-volume segments, the VW brand intends to launch the new Amarok midsize pickup truck at the end of 2022 and the new Tiguan compact crossover SUV in 2024. For the Chinese market, FAW-VW launched the Tavendor midsize crossover SUV in 2022 to cover all SUV segments.

  The VW Group’s global deliveries fell by 12.9% year-over-year (y/y) to 6.056 million units for the period January-September 2022. Deliveries decreased in all markets due to the impact of semiconductor supply shortages, the Covid-19 pandemic, and Russia’s invasion of Ukraine. Among the brands, the Volume brand group (VW Passenger Cars, Skoda, SEAT) sold 4.171 million units, down by 14.6% y/y, and unit sales at Audi (Premium brand group) amounted to 1.194 million units, down by 11.4% y/y, while Porsche (Sport & Luxury brand group) sold 222,000 units, up by 2.0% y/y .

  The VW Group gave up control of the Bugatti premium vehicle brand to a joint venture between a Croatian start-up and Porsche in November 2021. In September 2022, as part of the IPO of Porsche AG, the VW Group placed over 100 million preferred shares of Porsche in the IPO. The VW Group is expected to use the gains from this transaction for its electrification and development of autonomous driving technology.

  In Europe, the Russian invasion of Ukraine created impacts from March 2022. Especially, wiring harness supply shortages forced the VW Group to cease or transfer vehicle production. In China, the VW Group realigned its management and development organization and generated a cross-brand structure in August 2022. In the second quarter of 2022, the company’s vehicle production was affected by local lockdowns to deal with the Covid-19 pandemic, but in June, production started to recover. In North America, the VW Group plans to invest USD 7.1 billion over the next five years and make 55% of new vehicle sales in the U.S. all-electric by 2030. In South America, the Group intends to invest EUR 1 billion by 2027 to accelerate decarbonization as well as development of biofuels. In 2023, the Polo Track developed for the South American market is scheduled to be launched.

  The VW Group’s sales revenue for the period January-September 2022 increased by 8.8% y/y to EUR 203 billion and operating profit before special items grew 23.3% y/y to EUR 17.5 billion. Despite the persistent semiconductor supply shortages, the impact of the Russia-Ukraine conflict and the Covid-19 pandemic, the Group posted solid financial results. In October 2022, the Group confirmed the outlook for 2022 presented in July in most material aspects. However, deliveries for 2022 are now expected to be similar to the previous year level, down from a 5-10% growth, due to continued supply chain disruptions. Sales revenue is expected to increase by 8-13% y/y and operating return on sales before special items is anticipated to be 7.0-8.5%.

 

  Please refer to Part 1 of this VW Group series regarding its electrification, autonomous driving technology, software, and mobility services.

VW Groupの世界販売台数 VW Amarok
VW Group global sales VW Amarok midsize pickup truck developed with Ford (Source: VW)

 

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