Volkswagen improves profitability and economic efficiency in challenging environments

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Volkswagen improves profitability and economic efficiency in challenging environments

The Volkswagen brand sustainably improved the Group's economic performance in the first quarter of 2022. In the first three months, operating profit before special items increased to €513 million (Q1 2021: €490 million). Sales revenue reached just under 15 billion euros (Q1 2021: 17.6 billion euros) thanks to an optimized model and pricing policy, and deliveries in the same period amounted to about a million vehicles (1Q 2021: 1.36 million) since the war in Ukraine, the global shortage of semiconductors and the latest measures to combat the coronavirus in China. In contrast, the operating margin on sales before special items increased to 3.4 percent (Q1 2021: 2.8 percent).

“We have further improved our cost-effectiveness in these challenging environments. This only emphasizes that Volkswagen has chosen the right path to achieve a long-term increase in its competitiveness and profitability through the ACCELERATE strategy. That is why we have laid a very strong foundation for an accelerated transition to zero-carbon mobility and fully connected mobility,” said Volkswagen CEO Ralf Brandstatter.

Continued focus on cost-effectiveness – 2023 projections confirmed that Volkswagen continues to work diligently to improve its economic efficiency — for example, to further reduce fixed and overhead costs — in order to improve its competitiveness in the long term.

“We are currently facing various challenges such as geopolitical uncertainty, rising commodity and energy prices, and the impact of the pandemic in China. We are working to counter these risks through our efforts to reduce costs and improve the quality of our operating results in specific areas. However, we are on track with our target of an operating margin of sales of 6 percent in 2023,” said Volkswagen CFO Alexander Seitz. This forecast depends on how the war in Ukraine develops and, in particular, on its impact on the global economy and, accordingly, on the business activity of the Volkswagen brand. Consumer demand remains high for both internal combustion engines and electric models.

Further sharp increase in sales of all-electric models. In the first three months, 53,400 all-electric vehicles were delivered (+74%). The all-electric ID.4 played a key role in this. More than half

ID.4 electric vehicles were delivered, of which 30,300 units were handed over to customers. Volkswagen is currently expanding production capacity for its best-selling electric vehicle. On May 20, 2022, the Emden plant will begin series production of the ID.4, creating additional capacity for the successful model. In the second half of the year, the ID.4 will also roll off the production line in Chattanooga in the US. Models of all ID. the family continues to be in strong demand, with more than 120,000 customer orders,

Backlog for all models has reached an all-time high of over 670,000 vehicles in Europe alone. Therefore, the Group makes every effort to minimize the time of delivery to customers and process a large number of back orders as quickly as possible.

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