VW Group (Part 1): Reorganizing operations into 7 business units

Delay in change to WLTP emissions test in Europe; Offering incentives for diesel vehicle buyers

2018/11/06

Summary

  VW Group’s diesel scandal was revealed in the U.S. in September 2015. Matthias Müller, who assumed the role of CEO for the Group after the diesel scandal, reorganized the company to regain consumers’ credibility and restore its performance above the levels prior to the diesel controversy. However, the Group’s Supervisory Board and major shareholders dismissed him due to inadequate drastic reforms, appointing Herbert Diess as his successor in April 2018. CEO Diess implemented a significant restructuring of the VW Group’s organization in July 2018. He consolidated 12 automotive brands into four business units and will spin off its truck and bus division as well as its components unit. The Group is expected to become more efficient and capable by promoting quicker decision-making.

  The VW Group changed the name of its commercial vehicle division from VW Truck & Bus AG to TRATON AG in August 2018. The Group will spin off the unit through an IPO by the end of 2018. As a result, the parent company will be able to focus on its core businesses and introduce new technologies and services more quickly. At the same time, its truck and bus unit can be more active as an independent company in raising funds and exploring alliances with other companies. TRATON AG and Hino Motors agreed to enter a strategic alliance, beginning with the formation of a joint venture to develop electrification technologies and share procurement resources.

  In Europe, the new WLTP emissions test was introduced for all new car registrations from September 2018. WLTP measures fuel consumption during driving tests designed to represent real world vehicle operating conditions. VW is facing delivery bottlenecks for some models due to a lack of qualified staff for WLTP testing. This is because the emissions testing staff at VW is busy reevaluating an enormous amount of data relating to the diesel engines affected by scandal.

  In June 2018, VW took a major step toward overcoming the diesel scandal by paying the fine of EUR 1 billion that was mandated by the German public prosecutor. In Europe, the demand for diesel vehicles has been decreasing following the emissions scandal and several German cities which suffer from severe air pollution have banned the driving of diesel vehicles in those cities. The government of Germany unveiled measures in October 2018 requiring automakers to replace and/or repair EU1 to EU5 diesel vehicles to improve air quality and halt the decline in the demand for diesel vehicles, while requiring automakers to bear the associated costs. To support the government’s efforts, VW will offer incentives to replace older diesel vehicles.

  VW Group retained the title of the world’s largest carmaker in 2017 with a record global sales volume of 10.78 million units. The Group’s sales revenue also hit a record high at EUR 230.7 billion and operating profit doubled to EUR 13.8 billion. Regarding VW’s outlook for 2018, the Group’s deliveries are forecast to moderately exceed prior-year figures. Its sales revenue is expected to increase by up to 5% year-over-year, and operating return on sales is projected to be between 6.5% to 7.5% (compared to 7.4% in 2017).

  The VW Group’s new model launch plan, electrification strategy, autonomous driving technology, mobility services and activities in China will be reported in the sequel to this report, entitled “VW Group (Part 2)”.

VW Groupの世界販売台数 VW Groupの連結売上高と営業利益

 

Related Reports:
2021-2030 CO2 regulations in Europe, backlash against diesel, and electrification(May 2018)
VW Group (Part 2): implementing new "Together - Strategy 2025" plan(Jul. 2017)
VW Group (Part 1): 2017 sales revenue to increase by up to 4%(Jun. 2017)



Reorganizing business into seven units for faster decision-making

  The VW Group’s diesel scandal began in the U.S. in September 2015. Matthias Müller, who assumed the role of CEO of the Group following the scandal, reformed the company to regain the consumer credibility that it lost due to “Dieselgate”. In line with the Group’s Strategy 2025 ten-year business plan, he transformed the company’s core businesses, built the mobility solutions business, and secured funding. In 2017, the Group’s global deliveries again achieved a record high of 10.78 million units and operating profit in the amount of EUR 13.8 billion, which exceeded the 2014 level prior to the diesel scandal.

  However, VW Group’s Supervisory Board and its major shareholders dismissed Mr. Müller from his role as CEO due to inadequate drastic reforms of its bureaucratic organization, appointing Herbert Diess as his successor in April 2018. Mr. Diess, a former BMW executive, had joined VW in 2015. He is credited with achieving significant cost savings as the CEO of the VW brand of passenger vehicles. CEO Diess implemented a significant structural realignment of the VW Group in July 2018. He integrated 12 automotive brands into four business units and will spin off its truck and bus as well as its components divisions to achieve a more efficient company management structure with decentralized decision-making processes.

 

VW Group: reorganizing operations into 7 business units (July 2018)

Volume VW Passenger Cars, Skoda, SEAT, VW Commercial Vehicles (vans), MOIA (ride sharing)
Premium Audi, Lamborghini*, Ducati*
Sport & Luxury Porsche, Bentley, Bugatti
Truck & Bus MAN, Scania, Power Engineering*
Procurement/Components Procurement, Components**
Finance & IT VW Financial Services
China All brand businesses in China including SAIC-VW and FAW-VW

Source: VW Presentation Handout Analyst Meetings 2018.9.5
(Note) 1. * Allocation will be verified for Lamborghini and Ducati. Ducati is reported to be under consideration for divestment.
2. ** Temporary responsibility of Group CEO, which will become a combined Board of Management function.
3. VW Truck & Bus AG was renamed TRATON AG in August 2018.
4. The Components division, responsible for the development and production of components, will be made an independent subsidiary of VW AG effective January 2019 (announced in June 2018)



VW to spin off trucks unit TRATON in 2018; TRATON partners with Hino Motors

 VW Group changed the name of its commercial vehicle division from VW Truck & Bus AG to TRATON AG in August 2018. The new name gives the truck unit a new separate identity from the parent VW Group, making it easier to raise funding in capital markets. An IPO to list TRATON is being planned to occur by the end of 2018.

 The VW Group’s truck & bus unit (TRATON AG) formed a strategic alliance with Hino Motors in April 2018. The two companies will form a joint venture to develop electrification technologies and share procurement resources. The commercial vehicle market is fiercely competitive with five Chinese manufacturers among the top ten truck makers. While the manufacturers are required to conduct research and development of advanced technologies such as autonomous driving and electrification, TRATON and Hino have been considering cooperation in a wider range of fields. TRATON has also formed partnerships with Solera, a digital technology company, and Sinotruk, a heavy-duty truck manufacturer in China.

 Moreover, in June 2018, the VW Group and Ford Motor announced forming a strategic alliance and are investigating several joint projects including the joint development of commercial vehicles. However, the alliance is not likely to involve any equity sharing arrangements.

 

VW renames truck and bus unit TRATON

 VW Group announced that it officially changed the name of its trucks division from VW Truck & Bus AG to TRATON AG on August 30, 2018. VW Truck & Bus was established in 2015 with its brands including MAN, Scania, Volkswagen Caminhoes e Onibus and RIO. The company also holds a partial stake in Navistar, a U.S. truck maker. TRATON stands for a young company designed for and born in a new era of transportation, combining the words including TRAnsformation, TRAnsportation, TRAdition, TONnage, and always “ON”. The VW Group is planning to launch an IPO for TRATON by the end of 2018, but this could be considered a partial IPO because the Group will retain a majority influence on the truck maker.

 

TRATON and Hino Motors to intensify strategic partnership

Intensifying partnership On September 18, 2018, TRATON AG and Hino Motors disclosed the progress of their strategic alliance agreed in April and the plan to intensify the alliance in the following fields.
Cooperation in e-mobility The two companies will cooperate in the areas of electrified trucks and electrification technologies that they have developed independently, with both companies supplying its electric trucks for the product portfolio of each other. Through cooperation, they plan to leverage their development efforts and to bring products to market  more quickly. Hino Motors will supply hybrid trucks to MAN and Scania, subsidiaries of TRATON. TRATON will supply electrification technologies for heavy-duty trucks and Hino will provide technologies for light- and medium-duty trucks.
Establishment of procurement joint venture TRATON and Hino signed a Memorandum of Understanding for the establishment of a procurement joint venture. The two companies aim to realize synergies in global procurement for existing parts as well as parts for new technologies. Headquartered in Germany, the joint venture will have two bases, located in Japan and Germany. As a small entity, it aims to be operated efficiently with 10-20 employees. The next step in the establishment of the joint venture is to file for antitrust clearance with the aim of establishing the joint venture in the latter half of 2019.

 

TRATON: partnerships with Solera and Sinotruk

Collaboration with Solera for digital solutions TRATON announced plans to partner with Solera, a global leader in digital technologies, on September 18, 2018. The two companies will work together for fleet management, driver services and digital sales solutions for participants in the global commercial vehicle ecosystem. Both companies have united to help their customers solve challenges such as driver shortage and retention, security, truck utilization, load efficiency and predictive maintenance. Beyond this, the partnership also aims to shape and accelerate new business models of the future, such as freight hailing, secure logistics and tracking cargo using sensors.
Expanding partnership with Sinotruk TRATON announced a further expansion of its long-term partnership with the Chinese CNHTC Group on September 18, 2018. TRATON’s brand MAN and CNHTC’s Sinotruk have been working together since 2009 and have agreed to broaden the cooperation by establishing a joint venture to build MAN heavy-duty trucks in China. The two companies will also evaluate and intensify their cooperation on technology development and procurement. Since the beginning of the partnership, MAN has held a 25% stake plus one share in Sinotruk.

 

VW and Ford exploring strategic alliance

 VW Group and Ford Motor signed a Memorandum of Understanding on June 19, 2018, to explore a strategic alliance to strengthen their competitiveness and better serve customers globally. The two companies are investigating various projects in a number of areas including the joint development of commercial vehicles. It is likely that they are planning to develop a commercial van together. The potential alliance would not involve equity arrangements, including the crossholding of shares.


Europe: Introduction of new WLTP emissions test; drop in diesel vehicle demand

 In Europe, the new WLTP emissions test was introduced from September 2018. There used to be a large discrepancy between the fuel consumption in the product catalogs and actual on-road performance. To reduce this gap, WLTP measures fuel consumption during driving tests to represent real world vehicle operating conditions that better reflect actual on-road performance.

 Although the transition to WLTP was determined several years ago, VW is facing bottlenecks in implementing the new test procedure, so the shipment of several models is delayed. It has been reported that the number of testing staff for WLTP is insufficient because the VW emissions testing staff is busy with reevaluating an enormous number of diesel engines associated with the diesel emissions fraud scandal.

 

EU introduces new WLTP emissions test from September 2018

Outline The WLTP (Worldwide Harmonized Light Vehicles Test Procedure) was introduced to consolidate fuel consumption standards which vary by country or region. Compared to the conventional test procedures in Japan and Europe, WLTP measures fuel consumption in more realistic conditions, making international comparison easier. The average speed for WLTP is faster and driving times and distances are longer than in conventional tests. In general, fuel consumption measured by WLTP tends to be lower than that of the previous standards.
Introduction in Europe The WLTP was introduced in the EU-28 states plus six countries (Norway, Switzerland, Iceland, Turkey, Israel and Liechtenstein) for new passenger vehicles models from September 2017. WLTP was applied to new light commercial vehicles models and all passenger vehicles models, including existing models from September 2018. WLTP will be effective for all models of light commercial vehicles from September 2019.
Impact - WLTP measures CO2/exhaust emissions and fuel consumption under more realistic testing conditions.
- The CO2-value is measured for each version and is very precise.
- There are fewer errors even when the test conditions vary.
VW faces delay in implementation of WLTP VW had to retest more than 200 model variants when WLTP was introduced. Due to time consuming WLTP testing, some models could not gain type approval in time, resulting in the delay in shipment of 200,000-250,000 vehicles from the Group brands. Since there was no space to store new vehicles produced, some plants cut their operating days to three or four days a week from August 2018. Type approval for volume models such as Golf, Polo, Tiguan, Touran and Sharan seemed to have the most delays. It was reported that delivery times on popular models had to be extended by up to six months.
According to media reports, VW faced delays in the implementation of WLTP because it was unable to secure a sufficient number of testing staff. This was because VW’s testing staff were busy reevaluating an enormous number of diesel engines affected by the emissions fraud scandal.


 Regarding the diesel scandal, the German public prosecutor issued a court order against VW to pay a fine of EUR 1 billion in June 2018. VW examined and accepted this order and paid the total amount of the fine. VW, by doing so, hopes that this is the end to legal regulatory proceedings against the company. However, in Europe, there still remains legal risk including lawsuits filed by consumers who purchased the vehicles associated with the diesel emissions fraud scandal.

 The image of diesel vehicles also has suffered following the emissions scandal in Europe. The U.K. and France will ban the sale of gasoline and diesel engine vehicles by 2040. In February 2018, the Federal Administrative Court of Germany ruled that cities have the right to ban diesel vehicles in an effort to improve air quality levels. Munich and Stuttgart, two of the most polluted German cities, have banned the driving of diesel vehicles. While diesel owners are frustrated with the falling residual values of their vehicles, and sales of the latest models with clean diesel engines are stagnant, the government and the automakers have been urged to take some relief measures.

 In October 2018, the government of Germany required the automakers to bear the costs associated with replacing and repairing Euro 1 to Euro 5 diesel vehicles. In addition to the measures and incentives that VW had provided to its diesel customers, it will also offer new swapping incentives to support the government’s measures. Meanwhile, Porsche of the VW Group announced in September 2018 that it would stop the sales of diesel vehicles.

 

Diesel crisis

German public prosecutor orders a fine On June 13, 2018, the Braunschweig public prosecutor in Niedersachsen, Germany issued an administrative order against Volkswagen AG in the context of the emissions crisis. The order imposes a fine of EUR 1 billion, consisting of the maximum legal penalty of EUR 5 million and the return of fraudulent gain in the amount of EUR 995 million.
According to the investigation by the public prosecutor, monitoring duties had been breached in the Powertran Development department in the context of vehicle tests. A total of some 10.7 million vehicles with the diesel engine types EA288 (third generation), in the U.S. and Canada, and EA189, worldwide, being advertised, sold to customers, and placed on the market with unacceptable software functionality during the period from mid-2007 until 2015.
Following a thorough examination, VW accepted the fine and paid the total amount in full. VW, by doing so, hopes that this is the end to active regulatory proceedings against VW.
German public prosecutor arrests Audi’s CEO On June 18, 2018, Munich public prosecutor in Germany arrested Rupert Stadler, CEO of Audi at the time, as a part of investigation into the VW diesel scandal. He was taken into custody over concerns he would suppress evidence. (He was released at the end of October 2018.)
Legal risks There still remains legal risk in Europe associated with lawsuits filed by consumers who purchased vehicles affected by the diesel scandal. Lawsuits are pending in the judicial system for 17,300 customers in Germany, 2,000 in Switzerland, 6,000 in Slovenia, and 7,500 in Spain.

 

Government of Germany requires OEMs to bear costs for replacing and repairing older diesel vehicles

 The Merkel Administration in Germany unveiled measures on October 2, 2018 to curb air pollution in 14 cities whose air is particularly polluted and to prevent the possible enactment of driving bans of diesel vehicles in German cities by replacing and/or repairing Euro 1 to Euro 5 diesel vehicles. The measures will apply to some 1.4 million vehicles in 14 cities. The owners of the older diesel vehicles are being offered incentives to replace their cars with cleaner vehicles or required to repair their cars to improve the fuel consumption. The incentive of around EUR 10,000 will be offered by the automakers. Regarding the average cost of EUR 3,000 for repairing a vehicle, the government and the automakers are discussing scenarios in which the manufacturers bear 80% and the government bears 20% of the cost. (However, the automakers oppose the plan since repairs are technically not practical.)

 

VW: campaign for diesel vehicle customers; new swapping incentives in Germany

Additional guarantee for diesel vehicles VW has started to offer an additional three-year guarantee called Germany Guarantee from April 2018 to the buyers of new and year-old diesel vehicles. The Germany Guarantee gives buyers additional security. In the event of a driving ban of a certain diesel vehicle near their home or working address, a VW dealership will buy back the original model for the current value, provided the customer then buys a new vehicle from the same dealership.
New swapping incentives The VW Group has supported customers to replace their Euro 1 to Euro 4 diesel vehicles of VW, Audi, Skoda and SEAT brand with Euro 6 vehicles by offering environmental incentives for the period from August 2017 to June 2018. In October 2018, the Group announced a new incentive program in response to the federal government’s measures to promote fleet renewals. The swapping incentives envisaged by VW will be approximately EUR 5,000 on average for Euro 5 diesel vehicles and approximately EUR 4,000 for Euro 1 to Euro 4 diesel vehicles to be replaced with Euro 6 level vehicles. The amount of incentives will depend on the customer’s model. The VW Group intends to reach one million vehicle owners in 14 target cities.

 

Porsche withdraws from sales of diesel vehicles

 On September 23, 2018, Porsche announced that it will stop offering diesel versions of its models. Porsche is the first German automaker to withdraw from the diesel market. As a result of the emissions scandal caused by its VW Group parent, the image of diesel vehicles has suffered and the ratio of diesel versionsat Porsche fell to 12% of total sales in 2017.
 Porsche had purchased diesel engines from Audi of VW Group and equipped them on the Cayenne and Macan SUVs. The automaker will focus on electrified vehicles, with an investment of over EUR 6 billion for electrification through 2022. It plans to launch the Taycan electric sport car, the brand’s first EV in 2019, and aims to increase the sales of HVs and EVs to 50% of its total sales by 2025.


Passenger car deliveries for 1H 2018 increase by 7.0% to 5.15 million units

 VW Group’s passenger car deliveries for the first half of 2018 increased by 7.0% year-over-year (y/y) to 5.15 million units, hitting a record high for the first half year for the Group. While deliveries in North America increased only slightly, deliveries in Asia-Pacific, South America as well as Central and Eastern Europe grew significantly. China, the automaker’s largest market, continued to boost the Group’s sales as its deliveries climbed by 9.3% y/y to 1.99 million units. Deliveries in the Asia-Pacific region, including China, also expanded by 9.0% y/y to 2.14 million units. South America saw a surge of 10.6% y/y in its deliveries supported by recovery in Brazilian vehicle market. Deliveries in North America and Western Europe increased by 1.2% and 5.9% y/y, respectively.

 Deliveries under the VW Passenger Cars brand grew by 6.3% y/y to 3.12 million units, achieving a record high for the brand’s first half performance. Skoda and SEAT boosted the Group’s deliveries, by expanding their sales by 11.6% and 17.6%, respectively. Audi, Lamborghini, Porsche and Bugatti also experienced increased sales from the previous year.

VW Group乗用車地域別販売台数 主要乗用車ブランドの販売台数

 

VW Group deliveries (Units)

2016 2017 2016/2017 Jan.-Jun.
2017
Jan.-Jun.
2018
2017/2018
Passenger cars 9,635,486 10,038,650 4.2% 4,809,167 5,148,052 7.0%
Commercial vehicles 661,555 702,805 6.2% 346,282 370,934 7.1%
Total 10,297,041 10,741,455 4.3% 5,155,449 5,518,986 7.1%

 

VW Group passenger car deliveries by region and brand (Units)

2016 2017 2016/2017 Jan.-Jun.
2017
Jan.-Jun.
2018
2017/2018
Europe/other markets 4,062,454 4,167,647 2.6% 2,176,194 2,310,275 6.2%
(of which: Western Europe) 3,114,032 3,157,107 1.4% 1,685,189 1,784,271 5.9%
North America 928,033 962,980 3.8% 454,457 459,781 1.2%
(of which: Western Europe) 591,063 625,128 5.8% 293,432 311,892 6.3%
South America 362,343 445,636 23.0% 213,374 235,930 10.6%
Asia-Pacific 4,282,656 4,462,387 4.2% 1,965,142 2,142,066 9.0%
(of which: China) 3,975,071 4,173,834 5.0% 1,821,082 1,989,578 9.3%
Worldwide 9,635,486 10,038,650 4.2% 4,809,167 5,148,052 7.0%
VW Passenger Cars 5,980,309 6,230,229 4.2% 2,935,132 3,118,696 6.3%
Audi 1,867,738 1,878,105 0.6% 908,683 949,282 4.5%
Skoda 1,126,477 1,200,535 6.6% 585,013 652,735 11.6%
SEAT 408,703 468,431 14.6% 246,493 289,948 17.6%
Bentley 11,023 11,089 0.6% 5,238 4,430 -15.4%
Lamborghini 3,457 3,815 10.4% 2,091 2,327 11.3%
Porsche 237,778 246,375 3.6% 126,497 130,600 3.2%
Bugatti 1 71 7000.0% 20 34 70.0%

Source: VW Group Annual Report, Half-Yearly Financial Report (Jan.-Jun. 2018)
(Note) Deliveries include sales by the Chinese joint ventures.



Financial results for 1H 2018: sales revenue increases by 3.5% to EUR 119.4 billion; operating profit declines by 8.5% to EUR 8.2 billion

VW Group主要乗用車ブランドの営業利益

 VW Group’s sales revenue for the first half of 2018 increased by 3.5% y/y to EUR 119.4 billion, while its operating profit declined by 8.5% y/y to EUR 8.2 billion, which includes a number of negative special items of EUR 1.6 billion in connection with the diesel scandal. Earnings before taxes grew by 2.0% y/y to EUR 9.0 billion, and earnings after taxes increased by 2.1% y/y to EUR 6.6 billion.

 The VW Passenger Cars brand showed strong performance, registering a 7.7% increase in its sales revenue and a 19.9% growth in its operating profit. Sales increased for the T-Roc, Tiguan and Atlas and improved product costs had a positive effect on the brand’s profit. The Audi brand experienced sales increases of the Q2, Q5, A4 and A5. Audi’s operating profit improved owing to higher volumes and efficiency gains. The Skoda brand saw a 4.5% decrease in operating profit due to negative exchange rate effects and higher upfront expenditures for new products, while sales of the Karoq and Kodiaq vehicles increased. The SEAT brand’s operating profit grew by 63.1% y/y thanks to increased sales of the Arona and Ibiza as well as positive price and mix effects. The Porsche brand saw a 3.6% growth in its sales revenue and a 0.4% increase in its operating profit supported by higher volumes of the Panamera and 911.

 According to VW Group’s outlook unveiled in August 2018, its business results for 2018 will continue to be affected by the economic situation, exchange rate volatility and the diesel crisis. Sales in the EU may be impacted by a delay in the implementation of the new WLTP emissions test procedure. The Group’s global deliveries for 2018 are expected to moderately exceed the prior-year’s figures. Its sales revenue is forecast to increase by up to 5% y/y, and operating profit on sales is projected to be between 6.5% to 7.5% (compared to 7.4% in 2017).

 

VW Group consolidated financial results (in millions of EUR)

2013 2014 2015 2016 2017 Jan.-Jun.
2017
Jan.-Jun.
2018
Sales revenue 197,007 202,458 213,292 217,267 230,682 115,349 119,377
Operating profit 11,671 12,697 (4,069) 7,103 13,818 8,916 8,160
Special items - - (16,893) (7,520) (3,222) - (1,635)
Earnings before tax 12,428 14,794 (1,301) 7,292 13,913 8,799 8,972
Earnings after tax 9,145 11,068 (1,361) 5,379 11,638 6,474 6,613

Source: VW Group Annual Report, Half-Yearly Financial Report (Jan.-Jun. 2018)

 

VW Group sales revenue and operating profit by brand

Sales revenue (in millions of EUR) Operating profit (in millions of EUR)
2016 2017 Jan.-Jun.
2017
Jan.-Jun.
2018
2016 2017 Jan.-Jun.
2017
Jan.-Jun.
2018
VW Passenger Cars 105,651 79,979 39,661 42,704 1,869 3,301 1,776 2,130
Audi 59,317 60,128 30,011 31,183 4,846 5,058 2,680 2,761
Skoda 13,705 16,559 8,720 9,161 1,197 1,611 860 821
SEAT 8,894 9,892 5,054 5,786 153 191 130 212
Bentley 2,031 1,843 867 757 112 55 13 (80)
Porsche 20,710 21,674 10,841 11,231 3,733 4,003 2,056 2,064
VW Commercial Vehicles 11,120 11,909 5,927 6,324 455 853 448 567
Scania 11,303 12,789 6,307 6,515 1,072 1,289 673 684
MAN 10,005 11,087 5,297 5,814 230 362 193 258
MAN Power Engineering 3,593 3,283 1,579 1,637 194 193 73 68
Other (56,617) (30,288) (14,915) (18,399) (1,343) (2,335) (1,152) (921)
Financial Services 27,554 31,826 15,999 16,664 2,105 2,460 1,165 1,231
Special Items - - (7,520) (3,222) - (1,635)
VW Group 217,267 230,682 115,349 119,377 7,103 13,818 8,916 8,160

Source: VW Group Annual Report, Half-Yearly Financial Report (Jan.-Jun. 2018)

 

Proportionate operating profit at Chinese joint ventures using equity methods (in millions of EUR)

2012 2013 2014 2015 2016 2017 Jan.-Jun.
2017
Jan.-Jun.
2018
Proportionate operating profit 3,678 4,296 5,182 5,214 4,956 4,746 2,135 2,318

Source: VW Group Annual Report, Half-Yearly Financial Report (Jan.-Jun. 2018)



Sales Forecast by LMC Automotive: VW's sales to grow to 12 million in 2021

(LMC Automotive, Quarter 2, 2018)

VW Group主要乗用車ブランドの販売台数

 According to LMC Automotive's latest forecast (Quarter 2, 2018), VW’s global light vehicle sales volume is expected to be 10.82 million units in 2018, up by 3.4% year-over-year (y/y). While sales in the UK will fall by 6.0%, deliveries in the US and Germany will increase by 5.0% and 3.7%, respectively. With economic recovery, sales in Brazil will also grow by 26.1%. LMC Automotive forecasts that, after 2019, VW’s global sales will gradually rise and reach 11.97 million units in 2021, up by10.6% compared to 2018.

 VW’s sales volume in China, its largest market, is anticipated to grow by 1.5% y/y to 426,000 units in 2018 as the VW brand launches the sales of four locally-produced crossover and SUV models in the country. These include the T-Roc crossover, the redesigned Touareg crossover, plus an SUV and a crossover whose names have yet to be revealed. LMC Automotive presumes that the company’s sales in China will grow further after 2019 and reach 4.91 million units in 2021, up by 15.3% compared with 2018.

 In Germany, VW’s sales volume is expected to grow by 3.7% y/y to 1.36 million units in 2018. The potential for growth in the German market remains somewhat limited than other markets. Beyond the next few years, the adult population will decline, which will act as a market headwind. LMC Automotive predicts that the company’s sales in Germany will decline gradually to 1.32 million units in 2021, down by 2.9% from 2018.

 VW’s sales volume in the US is projected to increase by 5.0% and 3.6% y/y in 2018 and 2019, respectively. However, LMC Automotive forecasts that the company’s sales in the country will decrease after 2020 and fall to 650,000 units in 2021, down by 1.0% compared to 2018.

 

Volkswagen's light vehicle sales forecast (Top 10 countries)

(Click here to download major 58 countries forecast table.)

(Units)

COUNTRY GLOBAL MAKE 2015 2016 2017 2018 2019 2020 2021
Volkswagen
Group
Volkswagen 6,333,453 6,487,788 6,693,147 6,911,683 7,196,264 7,368,426 7,571,229
Audi 1,792,502 1,855,272 1,860,293 1,892,144 2,000,190 2,062,889 2,099,463
Skoda 1,039,473 1,136,323 1,191,237 1,234,276 1,220,105 1,357,479 1,414,497
Seat 398,777 414,292 460,247 509,181 502,438 539,819 558,745
Porsche 223,471 230,880 241,089 248,701 276,111 290,554 293,419
Bentley 9,160 10,549 11,510 11,261 12,575 13,354 13,744
MAN 0 0 1,718 8,047 9,703 10,110 10,502
Lamborghini 2,765 2,908 3,056 4,302 4,344 4,075 3,949
Volkswagen Total 9,799,601 10,138,012 10,462,297 10,819,595 11,221,730 11,646,706 11,965,548
China Volkswagen 2,719,438 3,057,058 3,184,548 3,214,518 3,442,472 3,605,982 3,686,519
Audi 572,398 590,565 604,093 626,769 645,213 680,713 718,820
Skoda 280,107 330,147 333,010 335,598 340,145 360,877 398,662
Porsche 61,928 64,057 71,058 79,830 94,547 99,718 104,926
Bentley 1,573 2,104 3,049 2,898 3,349 3,362 3,858
Lamborghini 127 188 184 291 431 444 485
Seat 8 0 0 397 0 0 0
China sub-total 3,635,579 4,044,119 4,195,942 4,260,301 4,526,157 4,751,096 4,913,270
Germany Volkswagen 738,905 710,513 689,202 718,253 694,929 678,909 659,497
Audi 269,107 289,711 283,242 289,395 294,971 297,330 295,258
Skoda 180,445 186,217 194,283 203,959 197,214 208,388 204,245
Seat 94,721 97,653 108,253 109,544 107,161 117,434 121,108
Porsche 28,554 30,220 29,283 29,813 30,650 31,113 29,881
MAN 0 0 690 3,069 4,088 4,259 4,415
Bentley 525 910 1,329 994 1,023 1,220 1,209
Lamborghini 223 255 294 526 458 382 394
Germany sub-total 1,312,480 1,315,479 1,306,576 1,355,553 1,330,494 1,339,035 1,316,007
USA Volkswagen 349,440 322,948 339,676 381,153 385,382 362,397 364,379
Audi 202,202 210,213 226,915 215,593 228,366 222,627 215,086
Porsche 51,756 54,280 55,420 55,653 62,185 68,045 66,791
Bentley 2,686 2,581 2,405 2,967 3,217 2,841 2,982
Lamborghini 1,009 963 1,095 1,312 1,365 1,290 1,118
USA sub-total 607,093 590,985 625,511 656,678 680,515 657,200 650,356
UK Volkswagen 267,070 252,651 250,064 230,740 224,078 225,802 224,385
Audi 166,709 177,304 174,982 170,212 172,792 174,636 179,178
Skoda 74,692 80,372 79,758 70,686 66,280 71,945 71,892
Seat 47,654 47,456 56,130 55,124 48,655 52,160 54,911
Porsche 12,167 13,097 14,051 13,004 12,430 13,194 13,550
Bentley 1,379 1,948 1,753 1,503 1,526 1,931 1,847
MAN 0 0 68 543 648 678 720
Lamborghini 284 303 257 521 403 357 334
UK sub-total 569,955 573,131 577,063 542,333 526,812 540,703 546,817
Brazil Volkswagen 360,412 228,456 272,134 346,413 356,134 373,898 451,092
Audi 16,612 11,594 9,910 9,023 11,368 14,869 16,708
Porsche 736 1,007 1,184 1,591 2,050 1,957 2,000
Lamborghini 12 5 12 13 17 17 13
Bentley 5 1 1 1 0 0 0
Brazil sub-total 377,777 241,063 283,241 357,041 369,569 390,741 469,813
Spain Seat 77,629 77,487 94,357 112,658 112,492 121,312 127,363
Volkswagen 99,121 104,142 105,992 119,460 119,252 120,077 117,720
Audi 44,081 51,679 54,817 57,970 64,193 67,855 67,487
Skoda 22,754 24,007 24,824 27,759 26,236 29,974 29,760
Porsche 2,089 2,230 2,308 2,293 2,810 3,031 2,943
MAN 0 0 54 354 403 429 452
Bentley 37 44 53 48 44 84 82
Lamborghini 11 16 14 27 27 22 21
Spain sub-total 245,722 259,605 282,419 320,569 325,457 342,784 345,828
Italy Volkswagen 123,283 146,589 153,141 164,998 168,987 175,244 173,021
Audi 54,329 63,283 66,689 67,862 74,144 79,170 80,113
Skoda 15,896 20,966 24,191 25,231 23,622 26,432 26,246
Seat 14,961 15,792 17,721 20,452 20,922 23,083 23,843
Porsche 4,970 4,988 5,353 4,811 5,662 6,310 6,237
MAN 0 0 50 195 223 229 222
Lamborghini 57 85 130 218 216 192 188
Bentley 22 1 0 18 32 108 109
Italy sub-total 213,518 251,704 267,275 283,785 293,808 310,768 309,979
Russia Volkswagen 84,097 80,720 96,459 99,936 116,908 131,866 156,546
Skoda 55,012 55,386 62,302 72,954 78,452 108,945 114,531
Audi 25,650 20,705 16,878 18,406 27,645 29,526 29,537
Porsche 5,290 4,961 4,578 4,485 5,155 5,551 6,014
Seat 47 0 0 240 2,023 2,432 2,286
Bentley 0 0 0 176 266 311 340
MAN 0 0 0 28 112 140 171
Lamborghini 0 0 0 81 94 102 102
Russia sub-total 170,096 161,772 180,217 196,306 230,655 278,873 309,527
France Volkswagen 160,240 158,890 154,150 157,753 157,971 157,764 153,512
Audi 59,499 65,615 66,501 64,014 71,851 75,538 75,283
Seat 22,417 21,915 24,959 27,969 27,711 29,672 30,848
Skoda 22,095 24,061 27,272 28,480 25,963 29,001 28,325
Porsche 4,928 5,390 5,450 4,800 5,384 5,584 5,454
MAN 0 0 150 817 886 892 909
Bentley 57 81 81 61 72 127 132
Lamborghini 41 69 68 106 104 92 93
France sub-total 269,277 276,021 278,631 284,000 289,942 298,670 294,556
Mexico Volkswagen 179,114 206,765 192,704 186,215 201,453 197,043 199,630
Seat 24,148 24,500 24,293 26,256 27,727 29,519 30,587
Audi 14,147 15,330 15,051 14,524 15,445 16,361 17,043
Porsche 1,208 1,498 1,506 1,425 1,530 1,542 1,584
Bentley 20 19 19 23 27 28 19
Mexico sub-total 218,637 248,112 233,573 228,443 246,182 244,493 248,863

Source: LMC Automotive "Global Automotive Sales Forecast (Quarter 2, 2018)"
*The table above shows data for selected countries, so the total of the country's in the table do not match the Volkswagen Group Total.
(Note) 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. All rights reserved. Reproduction of any data will require permission of LMC Automotive.
For more detailed information or inquiries about forecast data, please contact LMC Automotive.


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Keywords
VW, TRATON, Audi, Porsche, WLTP, diesel

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