Volkswagen wants to break up the production backlog this year and process the orders – in the event of a better supply of microchips and raw materials, this should also boost sales again.
After the deliveries of the largest European car group in 2022 had slipped by 7 percent to almost 8.3 million vehicles, mainly because of the supply problems, the Wolfsburg-based company is now targeting 9.5 million units for 2023. At the same time, sales should increase by 10 to 15 percent. The company presented the new outlook after a board meeting.
“We expect for the current year that the bottlenecks in the supply chain will gradually subside and that we will be able to service the high order backlog,” explained VW CFO Arno Antlitz. This is currently at 1.8 million cars. He had rocked up because – as with other manufacturers – there was a lack of electronics and some raw materials. This led to long waiting times for many customers and an overall shortage of cars.
Together with the general inflation, this recently also drove the prices for cars – except for the tense used car market. The strong demand, in which, according to VW, higher-quality equipment also played a role, made it possible for the group to earn more again last year despite the Ukraine war, expensive energy and the Covid lockdowns as well as trade difficulties in China.
An increase of a good 15 percent in operating profit
Earnings after taxes improved slightly compared to 2021 by almost 3 percent to 15.84 billion euros. If you include special effects such as the exit from the robot car start-up Argo AI or the interest rate development, operating profit rose to 22.12 billion euros – an increase of a good 15 percent. Before such influences, it climbed from a good 20 billion to 22.5 billion euros. Volkswagen had already presented the first key data on this at the beginning of February.
The network of companies with brands such as VW passenger cars, Audi, Porsche, Skoda and Seat was able to increase its earnings even in the previous year, which was burdened by corona. However, due to the supply problems, the sales of the second-largest car company after Toyota declined, although an increase of 26 percent was achieved for e-cars. VW also increased its sales from 250.2 to 279.2 billion euros due to price increases.
2023 will not be easy
Despite the relatively confident expectations, the current year will not be easy, Antlitz warned. The chief financial officer spoke of what was still a “difficult global environment” and “significant challenges in the supply chain”. The auto industry is weakening in a number of countries, the raw material and energy markets are fluctuating.
The manager also referred to the issue of stricter emission regulations. Above all, the question of how much the permitted emission of nitrogen oxides from combustion engines should be limited with the planned new Euro 7 standard is hotly debated. The EU states have also postponed a vote initially scheduled for next Tuesday on whether new cars with combustion engines may no longer be registered after 2035.
For the time being, VW is preparing to keep modern diesel and petrol engines on offer for some time, in addition to expanding the electric fleet. The models with fossil drives carry the main part of the returns that flow into investments. According to the latest targets, 7.5 to 8.5 percent should remain as an operating return in 2023 – that would be 7.50 to 8.50 euros for every 100 euros implemented.
In the meantime, the group is making progress in expanding its range of products in the US market. The first production plant for the planned all-electric SUV and pick-up will be built in Columbia, South Carolina, according to the VW sub-brand Scout. According to the information, the investments amount to two billion US dollars (1.88 billion euros). At least 4000 jobs are to be created. At full capacity, the plant could produce more than 200,000 Scout vehicles annually, it said.
