Volkswagen ‘stepping up the pace’ of China transformation as profits dip
Volkswagen saw revenue growth of 18 per cent to €156.3bn (£134.3bn) in its half-year results, as chip shortage supply chain issues eased and the group ramped up its EV production.
However, this was not enough to offset a year-on-year dip in operating profits, which came in at €11.3bn (£9.69bn) down from €13.2bn (£11.32bn).
The German carmaker also revised its outlook for deliveries for the year ahead, from 9.5m to 9 to 9.5m with downward pressures on the company shifting from semiconductor supply chain issues to “bottlenecks” in its logistics chains.
Shares were down three per cent on the German firm following the announcement.
Oliver Blume, CEO of Volkswagen Group, said: “In the first half of the year, the Volkswagen Group delivered reliably with very solid results.”
“Sales in North America are picking up, we are strengthening our position in China through technological partnerships and on top of that the trend for fully electric vehicles is moving in the right direction.”
Volkswagen, which has long had a strong presence in China, said today that it was “stepping up the pace” of its transformation in the country amid ongoing efforts to claw back market share and compete with major Chinese competitors BYD and Geely.
It has struggled to retain its position as most successful international OEM in the country, which has become a key battleground in the global race to transition to electric vehicles.
Global electric vehicle deliveries rose sharply, around 50 per cent throughout the half and representing a 7.4 per cent share of total deliveries, with Europe still remaining its strongest market.
However, vehicle deliveries declined by one percent in China, the company said, despite a turnaround later in the half.
Yesterday, Volkswagen announced it would invest $700m (£539.4m) in Chinese rival Xpeng in a bid to boost its competitiveness in the country and improve sales.
Arno Antlitz, CFO of Volkswagen Group: “In the first half of the year, we achieved solid financial results and took major steps to improve our competitiveness. The focus for the second half is now on strengthening net cash flow.
“With the launch of performance programs at all brands and our strategic decisions in China, we will improve the competitive position of the Volkswagen Group even further.”