As the earnings season continues, the Volkswagen Group (VAG) announced its results for the first three months of the year, which were marked by a lot of turbulence in the political, health, and financial sectors globally.
Overall, though, the car makers’ conglomerate stayed healthy in terms of their financial performance, and despite the lower volume of vehicle deliveries, posted an operating result of €8.3 billion, with a negative special item of €0.1 billion in the period related to the “diesel issue.”
The Volkswagen Group (VAG) delivered over 1.8 million cars throughout the three-month reporting period, a 22.8% drop compared to the corresponding period a year prior when the multi-brand carmaker delivered over 2.3 million passenger vehicles to customers globally. On a positive note, VAG delivered 12.3% more commercial vehicles in the quarter – a total of 67,755 trucks, buses, and vans.
“Between January and March 2022, the volume of the passenger car market worldwide noticeable declined as a whole compared with the same quarter of the previous year (–9.0%), negatively impacted primarily by bottlenecks and disruption in the global supply chains as a consequence of the semi-conductor shortage, the coronavirus pandemic, and the repercussions of the Russia-Ukraine conflict,” read the group’s Q1 2022 report. The report, talking about passenger vehicle deliveries, pointed out that only the group’s activities in Africa grew, as “all other sales regions were affected by losses.”
New Volkswagen, Audi, and Škoda products
Still, despite the difficult backdrop for an automaker, the brands within the group introduced new products in the first three months of the year, including newly-announced models.
In terms of the Modular Electric Drive Toolkit (MEB) platform, Volkswagen officially introduced the ID. Buzz, in passenger and cargo configurations, which included the “state-of-the-art assistance systems such as Travel Assist with the use of swarm data, automated parking, Plug & Charge technology for up to 170 kW of power, and a bidirectional charging system that enables integration of the vehicle into the home energy system.” The Wolfsburg-based manufacturer also introduced the reworked Volkswagen T-Roc, with a Cabriolet, and a top-of-the-range T-Roc R, with corresponding equipment for the range-topping model.
Other brands in the group also introduced new models, including Škoda‘s Enyaq Coupe IV, and the India-only Slavia notchback saloon, a successor to the Škoda Rapid saloon, following “the successful market launch of the Kushaq SUV,” in the Indian market, according to VW.
Audi, the luxury brand representative of VAG, also showcased its flagship four-door sedan, the A8, with “a sharpened design, particularly in the front and rear, and innovative technologies,” with around 40 assistance systems, including the Audi virtual cockpit. “The confident and progressive character of the luxury saloon has been emphasized even further, giving the model an increased presence of sporty elegance,” the quarterly report described the crown jewel of Audi's non-SUV lineup. In addition to the A8, the A6 Avant e-tron concept was also showcased, which is supposedly a near-production car, with a maximum electric range of up to 700 kilometers (around 435 miles).
While it was not an announcement of a concrete product, Volkswagen also indicated that as a part of “the strategic alliance between Volkswagen and the Fotor Motor Company,” focused on e-mobility, commercial vehicles, and autonomous driving, the two companies reached an agreement to “expand collaboration on the MEB (Modular Electric Toolkit) electric platform.” While no further detail was provided, it could be that the plan for Ford to “double its planned volume to 1.2 million vehicles over a six-year timeframe in order to produce another electric model in Europe in the future based on the MEB,” could indicate that the Ford Ranger-based VW Amarok pickup could finally become an electric reality, allowing the German carmaker to enter the electric pickup market. Most recently, that segment has been scorching hot, as Ford’s F-150 Lightning, the US-based carmaker’s first electric pickup truck, has been sold out for the rest of 2022, for one.
Electric success poised in the future
Predicting the future of the business is not an easy ordeal in these conditions, especially as the war in Ukraine continues, and with the ever-present risk of additional COVID-related supply chain woes, and an inflation-based recession, the economic outlook is not filled with sunshine and rainbows.
“Our planning is based on the assumption that global economic output will continue to grow in 2022, albeit at a somewhat lower level overall.” However, those assumptions can be overshadowed by a flareup of COVID-19, or if shortages of intermediates and commodities only worsen in the future. “We predict that trends in the markets for passenger cars in the individual regions will be mixed in 2022,” the report continued to describe the group’s outlook for the rest of the year, as Volkswagen expects the global sales volume of new vehicles to be slightly up compared to 2021, without reaching the pre-pandemic level.
In 2019, VAG delivered 10.7 million vehicles to customers throughout the year, while the two following years resulted in 9.3 million, and 8.8 million deliveries in 2020 and 2021, respectively.
Nevertheless, electric-powered vehicles, especially the MEB platform remain a bright spot for the group. Per Volkswagen Group’s Chairman of the Management Board Herbert Diess, the company has sold out its current and future electric vehicle inventory in Europe and the United States in 2022, with the situation in China “really picking up,” as reported by the Financial Times. In the first quarter of this year alone, the company shipped off 53,400 battery-powered cars to customers, a steep rise of 74% compared to Q1 2021, and “is now pressing ahead with the expansion of production capacity for its best-selling electric car,” namely, the ID. 4, of which it sold 30,300 units in Q1 2022.
“The backlog of orders across all drive types reached a historic high of more than 670,000 vehicles in Europe alone. The Group is therefore working hard on keeping delivery times for customers as low as possible and processing the large backlog of orders swiftly.”
Thus, while demand remains high, the challenges remain for the group to keep up with that demand, as manufacturing capacity is strained by difficulties outside of the carmaker’s capacity, including a supply shortage of semiconductor chips and other items.
