Volkswagen Commercial Vehicles reports a slight dip in growth whereas the Group’s Financial services brand reported record profits in 2019.
17 Mar 2020 | 29228 Views | By Autocar Professional Bureau
The Volkswagen Group's 2019 results indicates that it has registered 252.6 billion euro (Rs 2,058,277 crore) in sales revenue. The Group reports that its revenue after tax has come to 14 billion euro (Rs 114,531 crore) as against 12.2 billion euro (Rs 99,337 crore) in 2018. The Volkswagen passenger cars ...
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The Volkswagen Group's 2019 results indicates that it has registered 252.6 billion euro (Rs 2,058,277 crore) in sales revenue. The Group reports that its revenue after tax has come to 14 billion euro (Rs 114,531 crore) as against 12.2 billion euro (Rs 99,337 crore) in 2018. The Volkswagen passenger cars saw an uptick in sales revenue and operating profit. Volkswagen Financial Services too scripted an encore and clocked record operating profit. Meanwhile Volkswagen Commercial Vehicles' earnings decreased.
The Volkswagen passenger cars sales revenue was reported to be 88.4 billion euros (Rs 723,129 crore) in 2019, which is 4.5 percent higher than in the previous year. The operating profit before special items increased to 3.8 billion euros (Rs 31,084 crore) as against 3.2 billion euros (Rs 26,055 crore) last year. Improvements in the mix and price positioning in particular compensated for lower sales of Volkswagen passenger car models, new launch costs and negative exchange rate effect. The operating return on sales before special items increased to 4.3 percent as against 3.8 percent in 2018.
The diesel issue gave rise to special items of 1.9 billion euros (Rs 15,554 crore) which is the same as in 2018 (1.9 billion euro).
While Audi reported a decline in revenue at 55.7 billion euros (Rs 453,777 crore) from 59.2 billion euros (Rs 482,291 crore) in 2018, Skoda reported a 14.5 percent rise in its sales revenue in 2019 to 19.8 billion euros (Rs 162,082 crore). Volkswagen attributes Audi’s performance to the Group’s internal relocation of the multi-brand sales companies.
Skoda attributes it to the assumption of regional responsibility for India. Skoda claims that volume increases, mix optimisations and pricing measures more than compensated for negative effects resulting from cost increases and higher upfront expenditure for new products. For Skoda, the operating return on sales stood at 8.4 percent, compared to eight percent in the previous year.
Shifting into top gear
SEAT, Bentley and Porsche reported an upward trend in its revenue in 2019 at 11.5 billion euros (Rs 93,714 crore), 2.1 billion euros (Rs 17,191 crore) and 26.1 billion euros (Rs 212,699 crore) respectively. SEAT reported a 12.7 percent growth in its revenue from 2018 and its operating profit rose to 445 million euros (Rs 3,642 crore) in 2019 from 254 million euros (Rs 2,079 crore) in 2018. Bentley saw a rise of 35.1 percent in its sales revenue compared to 2018 and its operating profits bounced to 65 million euros (Rs 529 crore) from a de-growth of 288 million euros (Rs 2,346 crore) registered in 2018. Porsche’s YoY sales revenue rose by 10.1 percent in 2019 and similarly its operating profits before special items improved to 2.4 percent at 4.2 billion euros (Rs 34,384 crore).
Commercial segment stays afloat
Volkswagen Commercial Vehicles reported a sales revenue of 11.5 billion euros (Rs 93,736 crore) in 2019 as against 11.9 billion euros (Rs 96,997 crore) in 2018. Increased fixed and development costs for new products has reduced operating profit to 510 million euros (Rs 4,175 crore) in 2019 as against 780 million euros (Rs 6,386 crore) in 2018. Furthermore, the operating return on sales was 4.4 percent as against 6.6 percent in 2018 despite improved product costs.
In 2019, Scania generated sales revenue of 13.9 billion euros (Rs 113,319 crore) (2018: 13 billion euro/Rs 106,459 crore) and MAN Commercial Vehicles increased its sales revenue to 12.7 billion euros (Rs 104,002 crore) (up 4.6% over 2018). Going by the operating profit figures, Scania registered a 24.8 percent jump to 1.5 billion euros (Rs 12,231 crore) and MAN improved to 402 million euros (Rs 3,278 crore) in 2019(2018: 332 million euros/Rs 2,719 crore). MAN claims that this was negatively impacted due to expenses incurred in connection with the restructuring in India.
Volkswagen Financial breaking records
The sales revenue of Volkswagen Financial Services in the reporting year amounted to 38.0 billion euros (Rs 311,261 crore), an increase of 15.8 percent on the previous year. Operating profit rose by 13.3 percent and hit a new record of 3 billion euros (Rs 24,462 crore). Volkswagen claims that the increase was mainly attributable to business growth.
Dr Herbert Diess, chairman of the board of management of Volkswagen said, “2019 was a very successful year for the Volkswagen Group. We have laid vital groundwork for all relevant changes. 2020 is a very difficult year. The corona pandemic presents us with unknown operational and financial challenges. At the same time, there are concerns about sustained economic impacts. We will succeed in overcoming the corona crisis by pooling our strengths and with close cooperation and high morale in our Group.”
Frank Witter, Group Board of Management Member for Finance and IT, said, “The spread of coronavirus is currently impacting the global economy. It is uncertain how severely or for how long this will also affect the Volkswagen Group. Currently, it is almost impossible to make a reliable forecast. We are making full use of all measures in task force mode to support our employees and their families and to stabilize our business.”
Also read: Volkswagen India launches its first SUV of 2020, the Tiguan Allspace