The key points
3 ‘of reading
The group Volkswagen it returned in the first quarter of 2021 to a level of results close to that of the pre-pandemic, despite the persistence of the health crisis and the “slight effects” of the shortage of electronic chips, which should be “more significant” in the second quarter. The German group reports a net profit of 3.4 billion (3.05 in the first quarter of 2019) and an operating profit of 4.8 billion (3.9 in the same period of 2019). 2.4 million vehicles were sold (+ 21.2%). Revenues increased by 13.3% to 62.4 billion.
Premium brands protagonists
The accounts were supported above all by the cost-cutting program and by the performance of the premium brands, Audi and Porsche, which showed operating results well above one billion (1.4 for the four rings and 1.2 for the Stuttgart house). Confirming, as for competitors, that in this phase of difficulty on the production side (AlixPartners estimates a potential 100 billion dollars of lower turnover and 3.9 million fewer cars produced in the account of the semiconductor crisis in 2021) it is the premium models and those that guarantee the greatest margins that support the results. In the case of the Wolfsburg group it is therefore possible to raise the estimates for the current year.
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Improve profitability
The operating return on sales is in fact expected between 5.5% and 7% this year, compared to a previous range of between 5% and 6.5%. VW also increased its projection for net cash flow and net cash.
“We started the year with great momentum,” said CEO Herbert Diess in the statement. While demand has rebounded across the automotive industry in this early phase of 2021, manufacturers are grappling with a severe shortage of chips forcing them to suspend and prioritize vehicles that deliver the highest margins. Diess, as other automotive CEOs have already reported, said that the problems will increase in the second quarter and that some lines will be interrupted “for a few days, a few weeks”, even if the consequences will not be as pronounced as for some competitors.
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The battle to secure supplies is daily. Stellantis warned yesterday that the global semiconductor shortage will worsen between April and June, while Ford predicted a $ 2.5 billion drop from lost earnings from poor chip supplies. “We are fighting day after day,” Diess said in an interview with Bloomberg TV. “We are doing everything to keep production running.”