A man polishes a Volkswagen ID GTI Concept car on display at the International Motor Show (IAA) in Munich, southern Germany, on Sept. 5, 2023.
Image credits: Christof Stache | Afp | Getty Images
German Carmaker Volkswagen Reports 20% Drop in Operating Profit
German carmaker Volkswagen has announced a 20% decrease in operating profit in the first quarter of 2024, primarily due to weakened demand for its premium brands, leading to diminished sales volumes.
Lower Sales and Higher Fixed Costs Impact Profit
Volkswagen reported an operating profit of 4.6 billion euros ($4.9 billion) for the first three months of 2024, down from 5.7 billion euros during the same period in the previous year.
According to the company, the factors contributing to the profit decline include lower sales, higher fixed costs, and an unfavorable country, brand, and model mix.
Weak Sales Volumes
Volkswagen recorded a 2% decrease in vehicle sales, with a total of 2.1 million units sold in the first quarter of 2024.
Positive Outlook and Financial Targets
Despite the profit decline, Volkswagen remains optimistic, stating that it is still on track to achieve its 2024 financial goals. The company aims to achieve a 5% increase in sales revenue and expects a full-year operating margin range of 7% to 7.5%.
Volkswagen anticipates gaining momentum throughout the year with the launch of more than 30 new models across all brands. Additionally, the company believes that its efficiency programs will gradually yield positive results as the year progresses.
This is a breaking news story and will be updated shortly.
