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Volkswagen Group Achieves Solid Performance In First Half Of 2024 Despite Market Challenges
The Volkswagen Group delivered a solid performance in the first half of the year. In a demanding environment, 2024 marks the Group’s largest product offensive and a comprehensive restructuring of our business areas. The results reflect a successful team effort across all brands. Strategically, we have set a decisive course and the TOP 10 programmes are making good headway. We are accelerating our global software strategy with international partners and have completely realigned our set-up in China. The performance programmes are picking up speed across the Group and our new products are receiving positive feedback from global markets. This is a good basis. However, much of the work still lies ahead of us."Oliver Blume, CEO Volkswagen Group
"Our second quarter margin, before restructuring costs and other non-operational factors, came in slightly above our expectations. But what ultimately counts is the reported result. A margin of 6.3% after six months is below our ambitions and potential, given our array of great vehicles, our brand portfolio, and our global footprint. Given the expected product momentum and a solid order book, we confirm our outlook for the full year. However, we must make significant efforts on the cost side in the second half and beyond in order to achieve our targets."Arno Antlitz, CFO & COO Volkswagen Group
Volkswagen Group's sales revenue reached EUR 158.8 billion in H1 2024, up from EUR 156.3 billion in H1 2023 due to strong business development in Financial Services. The automotive business saw stable sales revenue despite a slight decline in vehicle sales worldwide.
The operating result for H1 2024 was EUR 10.1 billion, an 11% decrease from EUR 11.3 billion in H1 2023. This decline was mainly due to non-operating factors like unplanned provisions for severance at Volkswagen AG and higher fixed costs.
In H1 2024, Volkswagen sold 4.3 million vehicles globally, slightly down from 4.4 million in H1 2023. Growth in North America (+8%) and South America (+15%) nearly offset declines in other regions, particularly China.
Order intake for vehicles in Western Europe increased slightly by 2%, driven by a significant rise in all-electric vehicle orders (+124%). The order book extends well into Q4.
Outlook for 2024
The Volkswagen Group expects sales revenue to exceed last year's figure by up to 5% in 2024. The operating return on sales is projected to be between 6.5% and 7%. In the Automotive Division, an investment ratio of between 13.5% and 14.5% is anticipated.
The automotive net cash flow for 2024 is expected to range between EUR 2.5 billion and EUR 4.5 billion, including investments for future growth and cash outflows from mergers and acquisitions.
Detailed Brand Group Performance
The core brand group sold approximately 2,494 thousand vehicles generating EUR 69,051 million in sales revenue with an operating margin of around 5%. The progressive brand group sold about 539 thousand vehicles with EUR 30,939 million in sales revenue but saw a lower operating margin of around 6.4%.
The sport luxury brand group sold roughly152 thousand vehicles with EUR17,695 million sales revenue achieving an impressive operating margin of around16%. TRATON commercial vehicles generated EUR22,738 million with an operating margin close to9%.
Investment Plans
Volkswagen's investment plans include significant spending on electric vehicles (EVs) and autonomous driving technologies as part of their transformation strategy.
The company aims to maintain robust financing policies while focusing on sustainability initiatives across its operations worldwide.
Employee Statistics
As of June30th ,2024 ,Volkswagen employed approximately682 ,800 people globally .This figure has remained relatively stable compared to December31st ,2023 .The group continues investing heavily into employee development programs ensuring workforce readiness amidst evolving industry trends .
The Volkswagen Group has shown resilience amid challenging conditions during H12024 .While there are areas needing improvement such as cost management ,the overall outlook remains positive driven by strong product momentum robust order books strategic investments into future technologies .The company remains committed towards achieving its financial targets ensuring sustainable growth moving forward .
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