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Brand Group Core with robust unit sales and sales revenue development – High fixed costs impact profitability

Graphic titled "BRAND GROUP CORE" featuring an abstract, wavy turquoise line on a dark blue background with logos of Volkswagen, Škoda, SEAT, and Cupra in the top left corner.

In a year shaped by a persistently weak economic environment, more intense competition and political challenges, the Brand Group Core continues to concentrate in 2024 on successful model ramp-ups and execution of the performance programs in the various brands.

#Brands #Finance
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“Despite stable vehicle sales, in part bolstered by the launch of attractive new models such as the Tiguan, Golf and the all-electric ID.7 Tourer, we were not able to offset higher fixed costs in the third quarter, especially at the VW brand. Moreover, the market headwinds have become even stronger in recent months. That is why we need more far-reaching measures to finance necessary investments and thus safeguard the future of Volkswagen for the long term. In order to increase our profitability, we must vigorously expand and execute our performance programs. We have strong products, from ICEs and hybrids through to all-electric models. Provided we keep our eyes on the ball as regards costs, this is an excellent foundation for a good future.”
David Powels new Member of the Board of Management of the Volkswagen Brand responsible for “Finance” since October 1, 2024, and responsible for Finance at the Brand Group Core
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Key figures (Jan. – Sept. 2024)

3.63
million unit sales
of vehicles in the first nine months (3.57 million vehicles in Q1-Q3 2023).
Slight growth of 1.5% in unit sales in the first nine months of the year compared with the same prior-year period (Q3 2023: +0.7%). 
101.5
billion euros sales revenue
of Brand Group Core in year to date at a stable level (101.1 billion euros in Q1-Q3 2023).
Stable sales volumes in a challenging competitive environment due to slightly higher unit sales and pricing measures.
4.49
billion euros operating result
(2023: 4.99 billion euros).
Higher fixed costs and expenses for restructuring measures impacted the operating result and could not be offset by volume growth.
4.4 %
operating margin
of Brand Group Core in the first three quarters of the year (4.9% in Q1-Q3 2023).
Adjusted for provisions for termination agreements, the Brand Group Core’s operating return on sales in the first three quarters came in at 5.2%, but was only 3.2% in Q3 2024.
- 19.0 %
net cash flow
of 2.89 billion euros lower than the comparable prior-year period.
Higher inventories as a result of the model offensive and a rise in receivables led to a decrease in net cash flow.
Financial results of Brand Group Core from January to September 2024 compared to the previous year. The graphic displays percentage changes in areas such as sales, revenue, operating result, and net cash flow.

Outlook

In a year shaped by a persistently weak economic environment, more intense competition and political challenges, the Brand Group Core continues to concentrate in 2024 on successful model ramp-ups and execution of the performance programs in the various brands. With a clear focus on strict cost efficiency and the realization of synergies generated by cooperation, the Brand Group is currently developing more far-reaching measures to secure necessary investments for the future – and to increase profitability in the coming quarters. The basic principle is: Costs and expenditure down, efficiency, productivity and competitiveness up. The brands’ performance programs are closely tailored to these goals. The ambition is to further extend quality leadership, innovativeness and product substance for the long term.

There is a trend for higher demand for the Polo and the ID. 7. The volume brands reached important milestones in the first nine months of the year with the launch of attractive model innovations such as the Volkswagen Tiguan, Golf, ID.7 Tourer and VW Transporter, Škoda Octavia and Elroq as well as the CUPRA Terramar and Tavascan. The Brand Group Core therefore anticipates significantly more positive momentum in the coming months, as the market presence of the new models intensifies.

Overview of the brands in the Brand Group Core

Volkswagen Passenger Cars

Volkswagen Passenger Cars delivered 2,260,151 vehicles in the first nine months of the year, 1% up on the comparable prior-year period. At 63.5 billion euros, sales revenue remained at a stable level. The operating result before special items decreased by 36.9% to 1.34 billion euros. As a result, the operating return for the period January - September decreased to 2.1% (previous year: 3.4%). The brand benefited from mix effects as well as optimized material costs, while higher fixed costs and expenses for restructuring measures impacted the result.

Škoda Auto

Škoda Auto continued its positive momentum in the first nine months of 2024. 671,300 vehicles were delivered to customers from January to September 2024, 4.5 % up on the comparable prior-year period. The car maker performed particularly well in Europe – better than the overall European market. The financial data underscore the company’s strength: Sales revenue increased to 20.4 billion euros (+3.8 %), the operating result grew 34.8 % to 1.7 billion euros, the operating margin came in at 8.3 (6.4) %. The main drivers for earnings growth at Škoda Auto are a comprehensive model range and the efficient cost structure.

SEAT/CUPRA

SEAT/CUPRA reported moderate volume growth in the period under review, with vehicle deliveries running at 466,374 units, an increase of 2.6% compared with the same prior-year period. Sales revenue decreased by 3.0% to 10.5 billion euros. The operating result before special items ran at 415 million euros (previous year.: 501 million euros). The operating return came in at 3.9% (-0.7 percentage points).

Volkswagen Commercial Vehicles

Volkswagen Commercial Vehicles (VWN) had a strong first half of 2024, and performance for the nine-month period stabilized at the prior-year level. Unit sales of 310,000 vehicles (previous year: 313,000) and sales revenue of 11.09 billion euros (previous year: 11.11 billion euros) remained at a similar level. Due to foreseeable special items in connection with restructuring measures, the operating result for the first nine months decreased to 606 million euros (previous year: 672 million euros) – the operating return therefore decreased by 0.5 percentage points to 5.5%

Key figures for the Brand Group Core:

Key financials

Jan. – Sept. 2024

Jan. – Sept. 2023

Change

24 /23

Unit sales (thousand units; incl. vehicles from other brands)

3,627

3,575

1.5%

Sales revenue

101,523 million €

101,060 million €

0.4%

Operating result before special items, after restructuring

4,491 million €

4,985 million €

-9.9%

Operating margin before special items, after restructuring

4.4%

4.9%

-0.5%-points

Net cash flow

2,894 million €

3,573 million €

-19.0% 

Key figures for the brands belonging to the Brand Group Core*:

Unit sales

Sales revenue

Operating result

Operating return

000 units/ mill €

Jan.-

Sept. 24

Jan.-

Sept. 23

Jan.-Sept. 24

Jan.-Sept. 23

Jan.-Sept. 24

Jan.-Sept. 23

Jan.-Sept. 24

Jan.-Sept. 23

Volkswagen Passenger Cars

2,260

2,238

63,535

63,390

1,341

2,126

2.1%

3.4%

Škoda Auto

809

778

20,399

19,659

1,699

1,260

8.3%

6.4%

SEAT/CUPRA

466

454

10,515

10,837

415

501

3.9%

4.6%

Volkswagen Commercial Vehicles

310

313

11,093

11,109

606

672

5.5%

6.0%

*before special items, after restructuring measures

Christoph Adomat
Christoph Adomat
Volkswagen Communications | Communications Brand Group Core
+49 160 908 321 10 christoph.adomat@volkswagen.de
Press Release: Brand Group Core with robust unit sales and sales revenue development – High fixed costs impact profitability
The specified fuel consumption and emission data does not refer to a single vehicle and is not part of the offer but is only intended for comparison between different types of vehicles. Additional equipment and accessories (additional components, tyre formats, etc.) can alter relevant vehicle parameters such as weight, rolling resistance and aerodynamics, affecting the vehicle's fuel consumption, power consumption, CO2 emissions and driving performance values in addition to weather and traffic conditions and individual driving behavior. Further information on official fuel consumption data and official specific CO2 emissions for new passenger cars can be found in the "Guide to fuel economy, CO2 emissions and power consumption for new passenger car models", which is available free of charge from all sales dealerships and from DAT Deutsche Automobil Treuhand GmbH, Hellmuth-Hirth-Str. 1, D-73760 Ostfildern, Germany and at www.dat.de/co2.