VW Group’s sales and profit soar in 2012

Wolfsburg, April 15, 2013: The Volkswagen Group, which showcased its first fully electric production vehicle: the new e-up! yesterday, has reported increased sales and profits in calendar year 2012.

The Volkswagen Group's before-tax profits leapt by £5.7 billion (Rs 46,147 crore) to £25.5 billion (Rs 206,448 crore) in 2012 as sales of vehicles from its 12 brands – which include truck makers MAN and Scania – jumped by one million units to 9.3 million. Total VW Group 2012 revenue was £167 billion (Rs 1,352,032 crore), up 20.9 percent on 2011.

VW's automotive division now has a 12.8 percent share of the global car market. Of these 9.3 million sales, 5.7 million were VW-branded vehicles, up 12.8 percent over 2011. VW made an operating profit of £3.1 billion (Rs 10,524 crore), which was down four percent on 2011. Company bosses blame this on the significant costs of rolling out the new MQB platform and factory system. Skoda sales in 2012 were up 6.8 percent to 939,000 vehicles, but profits slipped to £618 million (Rs 5,003 crore). Seat sales dropped by 8.3 percent to 321,000 units, which VW attributes to the state of the Spanish and wider southern-European economy. Seat's losses were cut by £59.8 million, but it remained £135 million (Rs 1,092 crore) in the red.

Bentley continued its turnaround with sales in 2012 up from 7003 to 8,510 units, contributing to an operating profit of £86.7 million (Rs 701 crore). Porsche only became a full member of the VW Group in August, but it sold "over 140,000" units in 2012 – a record for the brand. VW said that the company made a profit of £820 million (Rs 6,638 crore) between August and December last year.

The Audi brand delivered 1.5 million vehicles (up from 1.3 million in 2011), and operating profits grew marginally to £4.7 billion (Rs 38,051 crore). VW Group sold 2.8 million cars in China, up 24.6 per cent year-on-year. VW Group says that the return on investment at its automotive division was down from 17.7 percent to 16.6 percent in 2012, though this is still well above its self-imposed target of 9 per cent. VW Group sold 1.4 million vehicles across January and February this year, up 8.3 percent year-on-year.

‘Volkswagen is feeling the headwinds – especially in Europe. Nevertheless, we remain guardedly confident,’ said Prof. Dr. Martin Winterkorn, chairman of the Board of Management of Volkswagen Aktiengesellschaft (pictured), on Thursday during the presentation of the company’s 2012 financial results. CFO Hans Dieter Pötsch was also satisfied with 2012. ‘We continued our successful course and further strengthened our market position thanks to our high profitability,’ said Pötsch. ‘Our growing presence in all key markets, our outstanding brand portfolio, our attractive product range and our broad financial services offering combined with our sound finances and forward-looking management are contributing to the systematic implementation of our Strategy 2018.’

Outlook for 2013

Volkswagen is starting 2013 from a position of strength, despite tougher competition and difficult economic conditions. Excluding MAN and Scania, 1.4 million vehicles have been delivered worldwide in the first two months of the year. At 8.3 percent, the Group grew more strongly than the market.

‘Volkswagen has everything it needs to continue its successful trajectory of recent years even under different circumstances,’ said Winterkorn, adding: ‘We want to lead the Volkswagen Group to the top of the automotive industry by 2018 – profitably, sustainably and permanently.’ In 2013, the Volkswagen Group’s brands will launch a large number of fascinating new models and so help further expand its strong position on the global markets.

Winterkorn was guardedly confident that the Group will outperform the market as a whole and deliveries to customers will increase. However, Volkswagen is not completely immune to the intense competition and the impact this has on business. The modular toolkit system, which is being continuously expanded, will have an increasingly positive effect on the Group’s cost structure. The Volkswagen Group’s 2013 sales revenue is expected to exceed the prior-year figure.

Given the ongoing uncertainty in the economic environment, the goal for operating profit is to match the prior-year level in 2013. Positive effects from its attractive model range and strong market position will be curbed by increasingly stiff competition in a challenging market environment. Disciplined cost and investment management and the continuous optimisation of Volkswagen’s processes remain an integral part of the Strategy 2018.