If Volkswagen's situation was already tense, the 3rd quarter results confirm that the manufacturer is in great difficulty. Its sales are in fact at their lowest, as are its profits which have plummeted in recent months.
The end of the year is approaching, and it's time to bilan du 3ᵉ trimestre for car manufacturers. Overall, the trend is not really celebrating, even for brands like Renault which are doing well but whose sales are still falling.
An alarming situation for Volkswagen
Not all brands are in the same boat, and for some, the situation is even particularly worrying. This is precisely the case for Volkswagen, which is having great difficulty selling its electric cars, particularly in Europe and China. This resulted in heavy losses, which led the brand to make difficult decisions, such as considering the closure of three factories as well as numerous layoffs. And this while the firm has already canceled the employment guarantee agreement in force for 30 years.
And the publication of results for the 3rd quarter of 2024 does not bode well for the firm, whose ID.7 Tourer we recently tested. Indeed, the figures are not good at all, as shown in the press release visible on the German group's website. During the period, which runs from the end of July to the end of September, Volkswagen only sold 2.12 million cars worldwidecompared to 2.31 million last year. Which corresponds to a drop of 8.3% compared to 2023.
If we look at the figures for the first nine months of the year, the results are not better, since the group recorded 6.46 million salesa drop of 4.4% compared to the same period last year. And inevitably, this had an impact on the company's financial results, which are also at their lowest. Volkswagen recorded a turnover of 78.48 million euros, i.e. a drop of 0.5% compared to last year.
Operating income, which does not include operating expenses, fell 41.7% during the 3rd quarter. In its press release, the German manufacturer explains that fixed costs have risen sharply over the first nine months of the year. This translates into a sharply lower pre-tax profit, of the order of -59.4%. And it's even more alarming after the various taxes, since the drop is shown at -63.7%.
A little light at the end of the tunnel?
Suffice to say that the situation is very tense for the German manufacturer, which has implemented a vast savings plan, aiming to reduce its expenses by around 10 billion euros. But the latter is more difficult than expected to implement, which has led Volkswagen to take drastic measures in order to preserve its competitiveness. This should notably involve a 10% reduction in remuneration of its employees, as well as the end of many benefits. But things might end up getting better.
In another press release, the group suggests slightly more encouraging prospects. If the net cash flow is decreasing, whether overall or only on the auto part, orders are up 9% in Western Europe since the start of the year. Deliveries to customers are expected to reach 9 million vehicles in 2024, compared to 9.24 last year. A small drop, but which remains relatively contained, thanks in particular to a positive reception of the new models.
The latest figures from Jato show that the Skoda Enyaq and other Volkswagen ID.4, ID.7 and ID.3 are in the top 10 best-selling electric cars in Europe in September. The Wolfsburg firm is also counting on a margin of around 5.6%while it must be remembered that the overall automobile market is also in decline. But where the manufacturer is having difficulty establishing itself is in China, where it has lost many market shares. And this is because of growing competition from local brands, such as BYD, SAIC or Geely, which are more competitive in terms of prices and production costs.
