Automotive News Europe — 2024-03-13
Automotive Industry
The automaker expects a tough year for car markets in light of rising costs, tougher competition and higher inflation.
Volkswagen Group expects a 3% rise in its car sales in 2024, down sharply from 2023 amid a gloomy economic outlook and growing competition.
Presenting the automaker's 2023 results, finance chief Arno Antlitz said the "general economic situation remains challenging," but added "we are confident about 2024, despite the muted economic outlook and intense competition."
Volkswagen Group's deliveries to customers rose 12% to 9.24 m vehicles in 2023. Deliveries of battery-electric vehicles by all group brands rose 35% to 771,100.
The automaker, which plans a record 30 new or upgraded models during 2024, said it has "started the new year with a clearly positive trend" compared with the start of 2023.
"To ensure that we remain successful sustainably, we will focus in 2024 on ramping up new vehicles and reducing costs," finance chief Arno Antlitz said in a statement on Wednesday 13 March 2024.
While Volkswagen is ready to give up market share in China in 2024 and 2025, North America has the potential to become its biggest growth market in 2024, Antlitz said.
The automaker released in March 2024 a muted outlook for 2024 ahead of what it expects to be a tougher environment for automakers in light of rising costs and fierce competition. The company expects sales revenue to grow by as much as 5% in 2024, slowing from 15% in 2023.
Volkswagen Group's 2024 product push includes the market launches of the VW ID7 and ID7 Tourer all-electric midsize models, the all-electric Porsche Macan and Audi Q6 E-tron, the VW Buzz long-wheelbase electric van and upgrades for the VW Golf, Tiguan, Passat, Skoda Octavia and Skoda Superb including new hybrid technology.
The company is currently in cost-cutting mode and has unveiled plans to slash administrative staff costs at its namesake brand by a fifth.
Volkswagen expects rising vehicle orders to help offset losses at its Cariad software unit, which reported an operating loss of €2.4 bn for 2023. Operating profit at Volkswagen's financial services arm declined by around a third last year due to falling prices for used cars.
Porsche highly profitable
Volkswagen said the operating return on sales of the Brand Core Group comprising Volkswagen passenger cars, Volkswagen Commercial Vehicles, Skoda, and Seat/Cupra rose to 5.3% from 3.6% in 2023, in an important first step towards its target of 8%.
Margin at the Progressive Brand Group (Audi, Lamborghini, Bentley, Ducati) fell to 9% from 12.3% and the margin at the Brand Group Sport Luxury (Porsche) remained at the previous year's level of 18.6%.
Volkswagen is under pressure to improve performance in China, where homegrown champion BYD overtook it as the best-selling automaker in 2023.
The automaker is trying to catch up by overhauling its electric offerings that have failed to impress local customers and is partnering with Chinese EV maker Xpeng. It's pursuing cheaper batteries and improved automated-driving features and aims to regain market share in China from 2026, Antlitz said.