Volkswagen Group’s profit drops 20% in the first quarter

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“As we expected, our first quarter results show a slow start to the year,” said Volkswagen Group CFO Arno Antlitz.

At the end of March, Europe’s largest vehicle manufacturer had achieved an operating profit (Ebit) of 4,588 million (-20%).

These figures are a consequence of fewer vehicle sales – 2% less, to exceed 2 million units – together with higher costs, associated with the launch of 30 new models in all its brands.

Net profit was 21.6% lower, ending March with 3,710 million euros.

Billing also had a slight impact of 1%, ending the quarter with 75,461 million euros. Despite these figures, the consortium is optimistic for the end of the year, and aims for its revenue to increase by 5% in 2024. The operating margin target is between 7% and 7.5%.

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“March has been strong, and we have a solid order pipeline,” Antlitz said. “This will have a positive effect in the next quarter.” According to the company, orders for electric vehicles are already double those registered in the same period of 2023.

By region, Asia-Pacific and South America presented the best results, with increases of 2% and 19%, respectively, while Europe and North America saw declines of 5% and 10%.

The volume brands, which the group calls Core, showed a 1% decline in billing, but increased their operating margin to 6.4% due to the effects of the sales mix. Even so, “the increase in fixed costs had a negative impact.”

The Sport Luxury division, which is basically the Porsche brand, saw its operating margin reduced to 14.8%, due to lower sales volume and the launch of two new model lines.

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