Volkswagen profits soar despite a drop in sales

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Volkswagen ID 4 2022 review 2

Volkswagen prioritised higher-equipped cars to ensure financial success in 2021.

Volkswagen sold 4.9 million vehicles in 2021, 8 per cent fewer than in 2020, yet increased sales revenue by 7 per cent to €76.1 billion (AUD$114.8bn).

It achieved a return on sales of 3.3 per cent, a significant increase over the 0.6 per cent of 2020.

Volkswagen ID 4 2022 review 3

While the reduced sales volume is a result of the global semiconductor shortage, the German company’s positive financial results were achieved by selling “higher-equipped cars and allocating semiconductors in such a way to increase margins,” according to finance boss Alexander Seitz.

Its businesses in North America and South America made a profit for the first time in a number of years, too.

Seitz also flagged reduced marketing spend and restrictive hiring programmes – which means Volkswagen’s employee headcount has stayed the same –  as two more cost-reduction measures.

Volkswagen wouldn’t share sales volume projections for 2022, citing the turbulence of the market from both the semiconductor shortage and other supply issues created by the Russian invasion of Ukraine.

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However, Seitz said he expects the semiconductor shortage to significantly ease in the second half of the year.

He added that the company’s goal to return 6 per cent on sales in 2023 is still on course.

Volkswagen sold 369,000 electrified vehicles last year, a rise of 73 per cent on the year before. Some 106,000 were plug-in hybrids and 263,000 were fully electric, meaning sales of zero-emissions car doubled over 2021.

These sales were predominantly of the Volkswagen ID 3 and Volkswagen ID 4 but also the new Volkswagen ID 5 and, in China, the ID 6.

Talking about his highlights of 2021, Volkswagen CEO Ralf Brandstätter said: “This past year was a challenging one for Volkswagen, and this isn’t going to change in 2022.

“A special moment was when we hit this button to activate the first over-the-air update for our ID models, which worked really well. It was a special moment for the team and it certainly was a highlight. That decision was pivotal.

“We’re going to build a new production facility with new engineering concepts.”

Rachel Burgess

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