Volkswagen Passenger Cars stays on track in difficult environment

• At EUR 2.5 billion, operating result before special items for first nine months is double figure for same prior-year period
• Operating return on sales before special items comes in at 4.7 percent
• Volkswagen CEO Thomas Schäfer: “The robust quarterly results show that Volkswagen remains on track despite an extremely challenging environment. We are maintaining the high pace by visibly and tangibly increasing the product substance of our models, speeding up our electric mobility campaign and aligning the product portfolio to customers’ needs.”
• CFO Patrik Andreas Mayer: “In view of the huge challenges arising from the strained supply situation we must continue with our systematic efforts to reduce costs and achieve the targeted increase in the quality of our operating result. The fourth quarter will be especially challenging with regard to global supply chains and parts supplies.”

The Volkswagen Passenger Cars brand further strengthened its economic efficiency in a persistently difficult environment. At almost EUR 2.5 billion, the operating result before special items for the first nine months of the current year was double the figure for the same prior-year period (EUR 1.2 billion), sales revenue rose to EUR 52 billion (prior-year period: EUR 49 billion). The net operating cash flow reached EUR 1.0 billion (prior-year period: EUR: -0.3 billion). Even though numerous customer orders could not be delivered as planned due to the persistent shortage of parts, the result was bolstered by a positive model mix and a recovery in delivery volumes in the third quarter: At 1.26 million, the number of vehicles delivered worldwide from July to September 2022 was 15.3 percent higher than the same prior-year period.

Thomas Schäfer, CEO of the Volkswagen Passenger Cars Brand, Member of the Group Board of Management and Head of the Volume Brand Group, said: “The robust quarterly results show that Volkswagen remains on track despite an extremely challenging environment. We are maintaining the high pace by visibly and tangibly increasing the product substance of our models, speeding up our electric mobility campaign with ten new models through 2026 and significantly simplifying the product portfolio. That is how we are reducing complexity in the company and becoming more efficient overall. We are making every effort to process the order backlog that has reached a historic high as swiftly as we can so that our customers can take delivery of their new VW as soon as possible.”

The goal is for the brands in the Volume brand group to cooperate even more closely to become even faster, more effective and more cost-efficient. Already this year, the Volume brand group factories have realized savings potential amounting to EUR 220 million. The aim is to increase efficiency for the entire Volume brand group by 20 percent in the synergy sectors in the medium term. The Volume brand group, comprising Volkswagen Passenger Cars, SEAT and CUPRA, ŠKODA as well as Volkswagen Commercial Vehicles, is under the responsibility of Thomas Schäfer in the Group Board of Management.

Focus on cost efficiency

Patrik Andreas Mayer, CFO of the Volkswagen Passenger Cars brand, commented: “In view of the huge challenges arising from the strained supply situation we must continue with our systematic efforts to reduce costs over the coming months and to raise the quality of our operating result. That is how we will lay the groundwork for Volkswagen to finance the transformation to e-mobility and digitalization from our own resources. “

High order backlog continues

The nine-monthly result was bolstered, among other things, by positive developments in delivery figures in the third quarter that showed further stabilization despite the bottlenecks in the supplier industry. At 1.26 million, the number of vehicles delivered between July and September 2022 was 15.3 percent higher than the same prior-year period – with deliveries in September particularly strong (+19 percent). As a result, the Volkswagen brand delivered 3.3 million vehicles worldwide in the first nine months of the year, of which 207,200 were all-electric ID. models (+23.5 percent).

The front runners were the ID.4⁰¹⁰²⁰³ and the ID.5⁰⁴⁰⁵, with deliveries totaling 122,600 units. In China, 104,700 ID. models (ID.3⁰⁶, ID.4⁰¹⁰²⁰³ and ID.6⁰⁷) were delivered in the first nine months, more than double the figure for the same prior-year period.

The Volkswagen brand’s order backlog remains very high, standing at 700,000 vehicles across all drive types for Europe alone. Volkswagen is working hard on further reducing delivery times for customers and processing the large backlog of orders as quickly as possible.

Outlook

The Volkswagen brand expects the volatile parts supply situation and mounting pressure from rising raw material and energy costs to continue in the fourth quarter and beyond the end of 2022. CFO Mayer commented: “The fourth quarter will be especially challenging with regard to global supply chains and parts supplies. That makes it all the more important to safeguard the result for the long term though cost discipline and by optimizing the model mix.”

Financial figures for Volkswagen Passenger Cars

Note: Structural changes as a result of separating out VW Group Components has led to changes in prior-year figures