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Changes in raw material prices, Volkswagen cut its profit margin forecast for the third quarter!

2024-03-03 Update From: AutoBeta autobeta NAV: AutoBeta > News >

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AutoBeta(AutoBeta.net)10/22 Report--

On October 20th, Volkswagen Group released its third-quarter earnings forecast. According to the financial report, Volkswagen's revenue in the third quarter was 78.8 billion euros, up 12% from a year earlier, higher than the market expectation of 76.1 billion euros, and operating profit was 4.9 billion euros, an increase of about 14% over the same period last year.

In its earnings forecast, Volkswagen announced a cut in its profit margin forecast for the third quarter, as changes in raw material prices led to a non-cash loss of 2.5 billion euros at the end of the third quarter, which could not be recovered by the end of the year. Volkswagen said it expects operating profit in 2023 to be the same as last year's 22.5 billion euros, meaning a return on sales of about 7 per cent and 7.3 per cent. Before that, the forecast for this figure was 7.5% Mel 8.5%.

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In terms of sales, data show that Volkswagen delivered 830600 vehicles worldwide in September 2023, an increase of 9.9 percent over the same period last year. Among them, 298800 vehicles were delivered in the Chinese market, down 0.9 percent from the same period last year; from January to September 2023, Volkswagen delivered 6.7158 million vehicles worldwide, an increase of 10.9 percent over the same period last year; of which, 2.2891 million vehicles were delivered in the Chinese market, down 3.0 percent from the same period last year.

In the third quarter of this year, Volkswagen Group's new orders for electric vehicles failed to meet the company's targets. According to the plan, Volkswagen aims for electric vehicles to account for 8% of total sales this year, down from the previous target of 11%. In fact, Volkswagen's pure electric vehicles accounted for only 7.9% of total sales in the first three quarters of this year.

Nonetheless, Volkswagen said it still forecasts full-year delivery of 9 million-9.5 million vehicles, with the market expecting 9.1 million, with expected growth of 10 per cent and 15 per cent, and revenue growth of 10 per cent and 15 per cent.

Judging from the above sales data, Volkswagen Group's global delivery volume increased in both September and the previous September, but the Chinese market declined synchronously. Auto Industry concern believes that the decline in sales in China 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.

Volkswagen Group, founded in 1938 and headquartered in Wolfsburg, Germany, is the largest car company in Europe and one of the first foreign car companies to enter the Chinese car market, which has now become the largest single market of Volkswagen Group in the world. Ralf Brandstaetter, chief executive of Volkswagen Group in China, said in an interview that "Volkswagen Group will continue to invest in China, otherwise it will lose competition in three years", it is not difficult to see the importance of the Chinese market to VW Group.

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In the Chinese market, Volkswagen is the most determined in the development of electric vehicles, and it is also an international car company with better development in the field of joint venture electric vehicles. The first ID since the end of 2020. ID that Volkswagen is selling in China since the introduction of electric cars into China. Family models include the ID.3, ID.4CROZZ, ID.4X, ID.6CROZZ and ID.6X, but Volkswagen is still unable to compete with mainstream Chinese electric carmakers. From January to September this year, Volkswagen ID.3 accumulated sales of 38678 CROZZ ID.4 and 16548 ID.4 X, while ID.6 CROZZ and ID.6 X sold only 9097 and 4216 respectively, according to the Federation of passengers.

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With the intensive listing of new cars in China and the continuous decline in the price of joint venture fuel vehicle brands, Volkswagen ID. Family products are also gradually lack of competitive advantage. For Volkswagen, the electrified transformation may cause short-term operational pains. Although the Volkswagen Group is speeding up the electrified transformation in China, unlike in the past, the competition in the new energy track is particularly fierce. This also means that there is not much time left for Volkswagen to "transform".

According to the plan, Volkswagen Group's brands, including Volkswagen and Audi, will offer more than 30 pure electric models in China by 2030. Among them, Volkswagen is stepping up its investment in the Chinese market in order to expand China's electric vehicle market share and promote the development and production of electric vehicles.

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