Volkswagen Group expressed confidence in improving its performance in the second half of the year, driven by a recovery in European electric vehicle (BEV) demand and the impact of new car launches. The company anticipates that cost-cutting measures and structural reforms will begin to show significant results.
According to Volkswagen Group, its revenue for the first half of the year was €158.1 billion, nearly unchanged from the same period last year (-0.2%). However, operating profit fell to €5.9 billion, a decrease of 11.6% compared to the previous year, with an operating margin of 3.8%.
The decline in performance was influenced by reduced sales in the Chinese market and production disruptions of electric vehicles in the United States. Global vehicle sales for Volkswagen Group in the first half of the year totaled 4 million units, an 8.4% decrease from the previous year, with sales in China dropping by 31.6%. In the U.S., the suspension of ID.4 electric vehicle production resulted in approximately €500 million in costs, negatively impacting profitability.
However, the European market is showing signs of recovery. Orders in Europe have increased by about 12% compared to the end of last year, with orders for pure electric vehicles rising by over 50%, now accounting for more than 30% of total orders.
The launch of new models is also expected to contribute positively. The new Electric Urban Car Family, led by the Volkswagen ID. Polo, secured over 70,000 orders within its first month of release.
Volkswagen Group noted that rigorous cost-cutting and structural reforms are yielding results. The automotive division's cash flow has improved from a €1.4 billion deficit in the first half of last year to a €3.2 billion surplus this year.
Oliver Blume, CEO of Volkswagen Group, stated, "The structural reforms implemented over the past three years are yielding visible results. Excluding China, global vehicle deliveries are increasing, and electric vehicle orders are expanding, so we expect solid performance even in a challenging business environment this year."
Nonetheless, the group has revised its revenue outlook for the year from a previous estimate of a 0-3% increase to a forecast of -3% to 0%. The operating margin forecast remains unchanged at 4.0-5.5%. Volkswagen cited international trade regulations, geopolitical risks, and fluctuations in raw material prices as key variables.
* This article has been translated by AI.
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