Volkswagen’s nine-month operating profit shrinks to 0.1 billion euros
Volkswagen’s operating profit fell from 5.4 billion euros to 0.1 billion euros in the first nine months. Vehicle sales declined 11 per cent, even as European orders grew. Management is pursuing a cost programme of around 31 billion euros, citing tariffs, competition and the lower earnings contribution of electric vehicles. Automotive net cash flow also increased.
Economics & Markets··Evening
Revenue and vehicle sales decline
German automaker Volkswagen generated revenue of 233.4 billion euros in the first nine months, below the year-earlier amount. Operating profit declined from 5.4 billion euros to 0.1 billion euros. Before special items, operating profit was 8.8 billion euros, equivalent to 3.8 per cent of sales.[1]
Vehicle sales dropped 11 per cent to 5.9 million, compared with 6.6 million a year earlier. Automotive net cash flow increased from 1.8 billion euros to 4.4 billion euros, a rise of 145 per cent.[1]
European electric-car orders grow
European order intake grew around 4 per cent, with battery-electric vehicle orders rising 39 per cent. Finance and operations chief Arno Antlitz said electric vehicles accounted for 40 per cent of the order bank. He said these vehicles currently generate lower earnings than combustion-engine models, putting pressure on the sales mix.[1]
Cost programme totals around 31 billion euros
Management is pursuing a cost programme of around 31 billion euros as tariffs, competition and the shift toward electric vehicles pressure earnings.[1], [2]
Antlitz identified a shrinking Chinese market and tougher European competition. Measures include fewer models, simpler structures, lower overheads, more efficient plants and faster technology development.[1]
