In the first half of 2024, Volkswagen’s Brand Group Core maintained stable sales revenue and executed successful model ramp-ups despite a persistently weak economic environment, heightened competition, and political challenges. The Brand Group Core plans to enhance profitability in the year’s second half through strict cost efficiency and leveraging synergies from cooperation and growth.
“The Brand Group Core made progress with its performance programs in the first half of 2024. However, despite all the cost-cutting measures already underway, we need to reduce our fixed costs still further to stay firmly on course in this difficult market environment. The additional headwind is clearly evident in our key figures, particularly for the Volkswagen brand: fixed costs have risen in the first half of the year – and could not be offset by vehicle sales or sales revenue. Moreover, provisions for termination agreements at Volkswagen AG also affected earnings. Without special items, we would have achieved an operating margin of 6.0% for our Brand Group Core, but we cannot afford to be satisfied with this performance, also bearing in mind that the share of electric vehicles – with their current lower margins – will increase going forward. It is vital that we continue to do all we can to execute our performance programs – and above all to systematically tap into the synergies between the brands in the Brand Group Core,” said Thomas Schäfer, Member of the Board of Management of Volkswagen AG and Head of the Brand Group Core.
Key figures for the Brand Group Core for H1 2024 include:
- A 1.8% increase in unit sales, totaling 2.49 million vehicles.
- Sales revenue of €69.1 billion, a slight increase from €68.8 billion in H1 2023.
- An 8.2% decrease in operating profit, amounting to €3.5 billion.
- A return on sales of 5.0%, down from 5.5% in H1 2023.
- A 21.6% decrease in net cash flow, totaling €2.0 billion.
Volkswagen Passenger Cars delivered 1,518,756 vehicles in the first half of the year, a 0.3% decrease from the prior-year period. Sales revenue decreased by 1.8% to €42.2 billion. Higher wages, provisions for termination agreements, and ramp-up costs contributed to a 41.1% drop in operating profit before special items, resulting in an operating return of 2.3%.
Škoda Auto saw a 3.8% increase in deliveries, reaching 547,690 units, with an operating profit of €1.147 billion, a 25.9% increase. The operating return rose to 8.4%, up from 6.6%.
SEAT/CUPRA reported an 8.5% increase in vehicle deliveries, totaling 344,313 units, and a 4.6% increase in sales revenue to €7.8 billion. Operating profit before special items increased by 9.4% to €406 million, with an operating return of 5.2%.
Volkswagen Commercial Vehicles experienced a 9% growth in unit sales, reaching 231,262 vehicles, and an 8.1% increase in sales revenue to €8.1 billion. Operating profit before special items rose to €641 million, a 42.9% increase, resulting in a 7.9% operating return.
Looking forward, the Brand Group Core anticipates increased profitability through cost efficiency, performance programs, and the launch of new models like the Tiguan, Golf, T-Cross, and the all-electric Volkswagen ID.7 Tourer. The Group aims to achieve an 8% operating return by 2026 through reducing complexity, shortening development cycles, and maximizing synergy potentials.
