Volkswagen’s global sales down 23% in H1 amid chip woes

Volkswagen Passenger Cars has reported strong financial numbers for the January to June 2022 period. Effective sale management, improved cost efficiency and consistent implementation of the ACCELERATE strategy have led to a strong financial result.

Operating result before special items rose to 1.9 billion euros (H1 2021: 1.2 billion euros). The operating return on sales before special items rose to 5.6 percent (H1 2021: 3.4%). The half-year result benefited in particular from a strong second quarter. This is also the main reason that the net operating cash flow reached 569 million euros in the first six months. As a result of optimized model and price policy, the company generated sales revenue of just under 33 billion euros (H1 2021: 36 billion euros) – despite a significant year-on-year decline in vehicle deliveries.

Chip woes limit sales to 2.08m, 25% more EVs sold in H1
Volkswagen says due to the war in Ukraine, the global semiconductor shortage and the coronavirus pandemic in China, global deliveries were 2.08 million vehicles (down 23.2%). VW is seeing growing demand for its EVs –116,000 units means that 25% more all-electric cars were delivered than in H1 2021. The clear front runner was the ID.4 – at around 63,000 deliveries – making every second BEV an ID.4. In China, Volkswagen’s deliveries of electric vehicles as much as doubled, and in June the number of vehicles in the ID. family reached a new record high, with 17,600 models delivered to Chinese customers.

According to Volkswagen, “Overall, demand remains high for both ICE and electric vehicles. The backlog of orders across all drive types stands at 728,000 vehicles for Europe alone, including around 139,000 all-electric ID.s. The Group is working hard on further reducing delivery times for customers and processing more of the large backlog of orders as quickly as possible.”

Commenting on the H1 2022 performance, Volkswagen CEO Thomas Schafer said: “We are making great strides in implementing our electric mobility strategy, digitalization and software, and picked up significant speed in the second quarter of 2022, despite the persistently strained supply situation. We continue to apply extreme cost discipline and will leverage even greater synergies at all levels within the Volume brand group. The aim is to increase efficiency by 20 percent for the entire Volume brand group in the medium term. For the second half of the year, we are cautiously optimistic that the supply situation will ease.”

The Volume brand group, which comprises Volkswagen Passenger Cars, Skoda as well as Volkswagen Commercial Vehicles, is under the responsibility of Thomas Schafer in the Group Board of Management. The brands are to cooperate even more closely in future to become even faster, more effective and more cost-efficient – and to turn the large volume of vehicles they produce into a competitive advantage.

VW lifts outlook for 2022 
“We expect the impact of commodity and energy prices to be significantly higher in the second half of 2022 than in the first half of the year. We are taking a bundle of measures to counter this trend. We are confident that we will largely be able to offset these price increases and continue our positive trend. We are for this reason lifting our outlook – providing that the supply situation develops according to expectations. For full-year 2022, we are now aiming for an operating return on sales before special items of 4 to 5 percent,” said Alexander Seitz. The full-year outlook was previously at up to 4 percent.