First-quarter sales revenue rose 22% to €76 billion, Volkswagen said, largely driven by a recovery in sales volumes in Europe and North America.
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German giant Volkswagen on Thursday reported a decline in first-quarter profit, saying weaker sales in China underline the need for the automaker to shut the gap with its rivals in the country’s fast-growing electric vehicle market.
Volkswagen said operating profit fell 31% to €5.7 billion ($6.3 billion) in the first three months of 2023, from €8.3 billion in the same period last 12 months.
Nevertheless, Europe’s biggest carmaker said operating profit before valuation effects from commodity hedging increased by 35% to €7.1bn.
First-quarter sales revenue rose 22% to €76 billion, Volkswagen said, largely driven by a recovery in sales volumes in Europe and North America.
“We had a really encouraging begin to 2023, with each revenue and underlying operating profit improving significantly,” Volkswagen CFO Arno Antlitz, Annette Weisbach of CNBC, told CNBC on Thursday.
“As you recall, after we announced our targets for 2023, they were quite ambitious, we received feedback, but based on this very solid first quarter and order book of 1.8 million cars in Europe, we’re confident that we are going to meet all our targets. financial goals for 2023”.
Volkswagen shares rose barely on Thursday morning. The share price has increased by roughly 5.5% since the starting of the 12 months.
Volkswagen said deliveries in China fell by 14.5% in the first three months of 2023, but stays confident sales will pick up by the end of the 12 months, citing an expanded model range and China-specific technology.
When asked about declining sales in China in the first quarter, Volkswagen replied to Antlitz: “We had a slow start in China.”
He added that it was essential to tell apart between the Chinese internal combustion engine market, where Volkswagen has long been a leader, and the domestic electric vehicle (BEV) market, where it desires to meet up with rivals, including Chinese electric vehicle giant BYD.
“Just got back from Shanghai, spent three days there taking a look at the competition cars, talking to the teams on the ground and it’s obvious we want to step up, especially on the BEV side,” said Antlitz.
“I’m convinced that we may even play a very important role in China in the future,” he added.