Volkswagen ha closed 2024 with a net profit decline of 30,6%, falling from 17,8 billion to 12,4 billion euros. The Operating income registered one decrease of 15% compared to the previous year, reaching 19,1 billion euros, with a operating margin of 5,9%, down from 7% in 2023. The decline in earnings was mainly due to Sales decline in China and increasing costs.
Il total turnover of the group, instead, reached 324,7 billion euros, exceeding the estimate of 321,65 billion. But the automotive division recorded a slight decrease in revenues, reaching 265,9 billion euros, due to the reduction in sales volumes. The net cash flow of the automotive division has more than halved, going from 10,7 billion in 2023 to just 4,8 billion in 2024, due to huge investments and the reduction in operating profitability.
Il decline in operating profit was determined by an increase in fixed costs, with extraordinary expenses of 2,6 billion, in particular for restructuring. The Vehicle Sales stood at 9 million units, slightly below expectations of 9,11 million and down from 9,4 million the previous year. The main factor weighing on sales was the weak performance in China.
To keep costs down, Volkswagen has reduced dividend by 30%, bringing it to 6,30 euros per ordinary share and 6,36 euros per preferred share.
Despite the declining results, the Volkswagen stock register a increase of over 3% on the Frankfurt Stock Exchange after the publication of the results, with analysts welcoming the fact that the data were slightly above expectations.
The crisis and the restructuring plan
2024 was a annus horribilis for Volkswagen, struggling with a structural crisis which required drastic measures as well as having cut his forecasts twice due to lower-than-expected sales. After three years of exceptional profits, German car manufacturers have found themselves facing falling demand, rising costs (especially energy costs) and competition from Chinese brands, which are increasingly strong in the electric car sector. In December, the Wolfsburg-based company announced a restructuring plan unprecedented, which includes the 35 job cuts in Germany.
Looking at individual divisions, Core Brand Group recorded an operating profit of 6,96 billion, just below the estimated 7,24 billion, with a margin of 5%. The sector Progressive suffered a significant decline, with a profit of 3,9 billion, well below the 4,44 billion forecast, penalized by the restructuring costs of the Brussels plant and by strong competition. The sector Sports & Luxury achieved 5,3 billion in operating profit, in line with expectations but lower than the 6,94 billion of 2023, due to the increase in development and digitalization costs. The Financial Services segment closed with a profit of 3,1 billion, confirming the forecasts.
Sales in Europe, China and America
The Wolfsburg Group recorded a 1,3% drop in global salesa total of 9,24 million of vehicles delivered in 2024. The performance weaker it was that of the market Chinese, where the car manufacturer has lost market share due to increasing competition from local brands.
In Europe and North America, the sales remained stablei, while in South America there was growth which, however, was not sufficient to compensate for the losses suffered in Asia.
On the front of the electric mobility, Volkswagen recorded increased demand in Western Europe: orders for fully electric vehicles (BEVs) increased by 100 percent, thanks to a renewed product portfolio. Overall, orders increased by 88 percent.
Expectations for 2025
For 2025, Volkswagen plans a revenue growth up to 5% and a operating margin between 7% and 8%. The company will continue to invest in the electrification and digitalization sector, while maintaining a cautious strategy in light of global economic challenges.
“In 2024, the Volkswagen Group has set a decisive strategic direction. With innovative and emotional products. With pioneering strategic decisions. In 2025, we will continue to focus on aconsistent implementation. With the increase in affordable electric mobility, our fleet of autonomous vehicles and the production of battery cells in Germany, Volkswagen is showcasing European innovation to the world as a global automotive technology powerhouse,” commented the CEO Oliver flower.
“In a competitive environment we have achieved an overall good financial performance in 2024. Our outlook reflects the global economic challenges and the profound changes that are taking place in the industry. We keep combustion engines technologically competitive, simultaneously invest in electric models and software, and continue to strengthen our regional presence,” said the CFO arno antlitz.
