Europe’s biggest carmaker Volkswagen on Tuesday said its operating profit fell 20 per cent in the first quarter as lower demand for its premium brands led to a drop in sales.
Operating profit was 4.6 billion euros ($4.9 billion) in the first three months of 2024, the company said. For the same period in 2023, operating profit was 5.7 billion euros.
Volkswagen cited lower sales and higher fixed costs, as well as an “unfavourable mix of countries, brands and models” as key factors behind the profit decline. Car sales in the first quarter fell 2 per cent to 2.1 million units, the company said on Tuesday.
Arno Antlitz, CFO & COO of Volkswagen Group, said in a statement:
As expected, our first quarter results show a slow start to the year.
Volkswagen said last week it aims to keep its share of the Chinese market roughly stable until the end of the decade, banking on heavy investment to support sales despite a fierce price war with local electric vehicle (EV) rivals. The company also still expects to meet its financial targets for 2024, including revenue growth of 5 per cent and a full-year operating margin in the range of 7 per cent to 7.5 per cent. Antlitz said:
We expect additional momentum over the course of the year from the launch of more than 30 new models across all brands. At the same time the effects our efficiency programs will gradually unfold as the year progresses.
