The car crisis continues and is clearly visible in the Volkswagen accounts (+0,87% in Frankfurt) which in the third quarter of 2024 saw profits and operating results collapse due to the sharp drop in sales in China (-10%) and the equally sharp increase in operating costs. All this just a few days after the announcement of the closure of three plants in Germany with related staff cuts.
Volkswagen's quarterly
In the third quarter of 2024, the leading European car manufacturer recorded a net profit of 1,58 billion euros, down 63,7% compared to the same period of the previous year, "weighed down by high costs and lower sales in China".
Il Group turnover fell by 0,5% to 78,85 billion euros, but remained above analysts' forecasts of 76 billion in revenues. The Operating income, down 42% to 2,86 billion euros, in line with the average estimate of LSEG of 2,80 billion euros, while the edge The corresponding margin was 3,6%. However, the market had expected an operating margin of 4,2%. The weak performance of the core brands, including Volkswagen, Škoda, Seat-Cupra and Volkswagen Commercial Vehicles, was the main factor.
“We still know how to build great machines, but costs are far from being competitive”, said Volkswagen Group Chief Financial Officer Arno Antlitz during the presentation of the financial results for the third quarter and the first nine months of 2024.
Moving on to the nine months, in the period Sales in China fell 10%, with the company's market share falling to 2023% in 14,2 from 19,3% in 2020, weighed down by competition from Asian manufacturers, led by BYD, and by declining sales of diesel and petrol vehicles. As for the electric cars, in the first nine months of 2024, Volkswagen delivered 507 thousand units, equal to -5% year on year and a share of the entire production (6,5 million) of 8%, a percentage very far from the 20-25% necessary in 2025 to comply with the emission limits imposed by Brussels (otherwise there would be heavy sanctions).
Confirmed estimates (previously cut)
Volkswagen confirmed its profit forecast, which had been lowered several times this year, following rivals BMW and Mercedes-Benz, and its margin forecasts. As a result, the company continues to forecast operating profit of around 18 billion euros for 2024, which would correspond to a margin of around 5,6%. “This highlights the urgent need for significant cost reductions across all Group brands and efficiency gains,” CFO Arno Antlitz said in the statement, referring to the radical savings plan that the union made public on Monday and which includes Closure of 3 factories in Germany, for the first time in 87 years of history, tens of thousands of layoffs and 10% pay cuts. A second round of negotiations between Volkswagen and the powerful German union IG Metall is due to begin today, after the head of the works council threatened to break off talks and launch strikes.
