On July 27, Volkswagen held its first half of 2023 earnings meeting. Volkswagen's revenue in the first half of this year was 156.3 billion euros, up 18% from a year earlier, its operating profit was 11.3 billion euros, down 14% from a year earlier, and its operating profit margin was 7.3%, compared with 10% in the same period last year, according to financial data. According to the data, although Volkswagen's revenue has increased, profits have declined.
In terms of new car delivery, data show that Volkswagen delivered 4.372 million vehicles in the first half of 2023, a year-on-year increase of 12.8%. Among them, the markets in Europe and North and South America performed better. In contrast, Volkswagen's share of global sales in China fell from 37.9 per cent to 33.2 per cent, with market share lower than in Europe, with Volkswagen delivery falling 1.2 per cent to 1.452 million vehicles in the first half compared with the same period a year earlier.
In April this year, Volkswagen Group announced at the Shanghai Auto Show that it would invest about 1 billion euros to set up a new wholly-owned company in China, and the new company would be located in Hefei. In May, Hayorgen, chief financial officer of Volkswagen Group (China) Volkswagen Anhui, said that Volkswagen Anhui will continue to invest in Hefei, Anhui, with a total planned investment of 23.1 billion yuan. As for why Volkswagen Group invested so heavily in Volkswagen Anhui? Auto Industry concern believes that it may be related to the current changes in China's electric car market and the performance of Volkswagen Group's electric vehicle sales in China.
The latest figures show that Volkswagen's global delivery of pure electric vehicles rose 48 per cent to 322000 vehicles in the first half of this year compared with the same period last year, of which only 62400 were delivered in China, down about 2 per cent from a year earlier. In view of the poor performance of the Chinese market, Volkswagen lowered its annual delivery volume from 9 million to 9.5 million vehicles to a minimum of 9 million vehicles, while Volkswagen will improve its financial position in the second half of the year by raising prices and cutting costs.
At present, Volkswagen is actively adjusting its electric development strategy, including announcing a $700 million stake in Xiaopeng and signing a strategic memorandum between its Audi brand and SAIC to speed up the development of new electric models. According to incomplete statistics, since 2020, Volkswagen Group has invested more than 65 billion yuan in China's new energy vehicle industry. In other words, Volkswagen has invested 65 billion yuan in four years, and this series of actions of Volkswagen Group are all aimed at deepening the Chinese market.
Nissan also adjusted its expectations because of the poor performance of the Chinese market. On the same day, Nissan released its financial results for the first quarter of fiscal year 2023 (April 1, 2023-June 30, 2023). According to the financial report, in the first quarter of fiscal 2023, Nissan's consolidated net income was 2.92 trillion yen (about 147.837 billion yuan) and the combined operating profit was 128.6 billion yen (about 6.511 billion yuan), with an operating profit margin of 4.4%. Net income is 105.5 billion yen (about 5.341 billion yuan).
In response, Nissan officials said that in addition to the Chinese market affected by increased sales competition in the industry, resulting in a decline in sales, sales in other regions increased significantly compared with the same period last year. Data show that Nissan achieved order growth in North America, Japan and Europe in the second quarter of this year, but sales in China fell short of expectations.
Nissan sold 358500 vehicles in China in the first six months of this year, down 24.4 per cent from a year earlier, according to data. Nissan CEO Makoto Uchida attributed the decline in sales to the impact of a price war in the Chinese market and growing demand for electric vehicles. "in response to the decline in sales in the Chinese market, Nissan is constantly strengthening its product lineup, launching super-hybrid electric drive Qijun with second-generation e-POWER technology and Qichen brand plug-in models," it said. The business environment of the Chinese market is undergoing tremendous changes, the competition is becoming increasingly fierce, and the recovery of the business will not be achieved overnight. "
Given the decline in Nissan's sales in China, Nissan expects full-year sales in fiscal 2023 to fall 7.5 per cent to 3.7 million vehicles compared with previous forecasts. At the same time, Nissan cut its sales forecast for the current fiscal year in China to 800000 vehicles from an initial 1.13 million, down 23% from a year earlier. According to foreign media reports, Nissan will consider exporting cars from China to digest its production capacity in China. Nissan chief executive Makoto Uchida said Nissan must consider new measures to support its business in China. "We need to improve our cost competitiveness and enrich our product lineup, which will determine our survival in China. It is not easy to restore performance in the Chinese market. "
In fact, both Volkswagen and Nissan lowered their sales targets because of poor performance in the Chinese market. With the reform of the car market, fuel vehicles have reached their peak, new energy vehicles have gradually become an important product in the layout of traditional automakers, and the Chinese market has become the largest new energy market in the world. "fuel vehicles cannot support the market and the transformation of electric vehicles is slow" is one of the reasons why it is difficult for some joint venture car companies to boost sales in China. The industry believes that in the new energy era, follow-up joint venture car companies do not seize time to boost the electrification process. China's market share is likely to continue to be carved up, and the pressure in China will be even greater.
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