VW Group maintains strong outlook for 2011
The Volkswagen Group is on a relentless pursuit to overtake Toyota as the world’s biggest automotive manufacturer, and while they are not quite there yet, they are certainly on the right path to do so. The company recently declared its first half performance, and one of the key figures reported was a strong 14.3% year-on-year increase in vehicle deliveries for the first half of 2011.
From approximately 3.6 million vehicles delivered in the first half of 2010, the combined efforts of Volkswagen, Audi, Skoda, Seat, and the various brands under the VW Group umbrella have seen 4.1 million vehicles find homes in the first half of this year. In terms of global market share, that is an increase from 11.7% in 2010 to 12.4% this year.
Increase in sales naturally brings about increase in earnings, and there was a 25.8% year-on-year increase in revenue to €77.8 billion. Even sweeter news for the shareholders is that operating profit has more than doubled, climbing from €2.8 billion to €6.1 billion. Factoring in earnings from its Chinese joint ventures and ties with Porsche sees the group pocket a cool €6.5 billion in profits after tax.
The various passenger car brands of the Group each reported sales increase in varying numbers. Parent brand Volkswagen leads the way with some 2.2 million vehicles sold world wide, thanks to reportedly strong demand for the Polo, Tiguan, Touareg, Jetta, Passat Variant (that’s how they call the Passat estate) and Sharan.
Audi, now a big scourge worldwide for Mercedes and BMW, recorded a 15.3% year-on-year sales increase with some 762,000 vehicles sold. During the period, Ingolstadt contributed some €2.5 billion in operating profits to the Group’s coffers, up from €1.2 billion reported last year. Seat, which is parked under Audi under the Group’s set up, saw an increase of only 1.0%, but that was recorded amidst a slump in the Spanish passenger car market. The brand currently operates at a loss, though deficit has come down to €48 million compared with the prior-year figure of €157 million.
Things are much rosier over at Czech subsidiary Skoda, which reported an impressive 21.3% increase in vehicle sales (from 298,000 to 362,000), and an even more impressive 81.5% increase in operating profit (€227 million to €412 million). Although Skoda is not a highly regarded brand in our part of the world, educated European buyers are warming to its charms as it products are packed with the Group’s latest technologies at a fraction of the price. Word has it that the parent company are now a little worried that Skoda might end up outdoing VW some day!
The Volkswagen Group is expecting global demand for passenger cars in full-year 2011 to outstrip the figure for the previous year. As a result, the Board of Management has confirmed its target of again increasing in deliveries in the current year. According to Board Chairman Prof. Dr. Martin Winterkorn, “The ongoing strong demand in strategically important markets is providing a tailwind, while our large number of new models is giving us an additional boost.”
The strained debts of certain European countries are expected to curtail sales in the Western part of the continent somewhat, but Volkswagen is expecting growth in Central and Eastern Europe, along with China, India, North America, and South America to fuel its growth this year. Winterkorn further believes that the Group’s modular toolkit system, which is continually being optimized, will have an increasingly positive effect on the Group’s cost structure.
KON
