22/03/14
Lead
Over the past few years, Volkswagen has learned to better mitigate the impact of the crisis on business development. And in the future, it has every opportunity to use these experiences to stay on track during these difficult times.
Author 丨 Li Sijia
Responsible editor 丨 Luo Chao
Edit 丨 Chic
A few days ago, Volkswagen Group released its 2021 annual report.
According to the data, the Volkswagen Group's revenue in 2021 increased by 12.3% year-on-year to 250.2 billion euros; operating profit increased by 99.2% year-on-year to 19.275 billion euros; operating profit margin increased from 4.3% in 2020 to 7.7%; pretax profit increased by 72.5% to 20.1 billion euros; and after-tax profit increased by 74.8% to 15.4 billion euros.
As we all know, the shortage of semiconductors and the decline in the performance of some markets were the problems faced by the upstream and downstream of the entire automotive industry last year, and this shackle also led to the Volkswagen Group's car sales in 2021 falling by 4.5% year-on-year to 8.882 million units.
But even after losing 600,000 units, thanks to a better product mix and higher pricing, the Volkswagen Group has achieved upward growth in performance and operating margins, which seems to prove the stability of its own development model and the effectiveness of transformation.
1
Sales are down, earnings are up
The Volkswagen Group delivered 8.882 million vehicles in 2021, down 4.5% from 9.305 million units in 2020. Among them, among the nearly 9 million vehicles, 4.8969 million Volkswagen brand passenger cars and 359,500 commercial vehicles.
Under the decline in sales, it is the sluggish performance of core brands such as Audi and Skoda. Among them, Audi's total deliveries of 1.68 million units are almost the same as in 2020 but behind rivals BMW and Mercedes-Benz; Skoda's global sales in 2021 fell by 12.6%, with total deliveries of only 878,000 units.
In addition, SEAT sold 471,000 units, up from 427,000 units in the same period in 2020, while Porsche set a new delivery record with sales of more than 300,000 units and a sales growth rate of 10.9%, ranking first among the core brands of the Volkswagen Group. Among them, the Macan is its best-selling product, with 88,000 units delivered worldwide.
On commercial vehicles, MANAG (MANN) and SCANIA (Scania) increased by 27.8% and 25.4% respectively from 2020; volkswagen supercar divisions, consisting of Lamborghini, Bentley and Bugatti, delivered a total of 23,000 vehicles, an increase of 23.6% over last year.
In major markets around the world, the Volkswagen Group has also performed differently.
In total, Volkswagen delivered 3.519 million new vehicles in Europe, down 2.7% year-on-year. Total sales in Western Europe were 2.86 million units. New energy vehicles are very popular in Europe, especially in Western Europe, accounting for 10.5% of the Group's deliveries in Western Europe, compared with only 6.2% in 2020. Such a performance makes Volkswagen the leader of the Pure Electricity Market in Europe.
In the Americas, Volkswagen Group's Sales in North America totaled 908,000 units, up 15.6% y/y. This positive sales increase was primarily driven by the U.S. market, where deliveries increased 16.9 percent to 672,000 units, while Volkswagen's cumulative sales of 514,600 units increased 5.1 percent in South America. Brazil, the region's largest market, delivered essentially the same as 377,000 units in the same period last year.
Shipments in the Asia-Pacific region decreased 12.4% y/y to 3.611 million units. As the largest single market of the Volkswagen Group and one of the hardest hit areas of chip shortage, the delivery volume in the Chinese market fell by 14.1%, with total sales of 3.305 million units.
Overall, although the Volkswagen Group's sales declined last year, the electrification transition has nearly doubled its global delivery of pure electric vehicles to 453,000 units.
In Europe, Volkswagen accounts for 25% of the pure electric vehicle market share; in the United States, it ranks second with a share of 7.5% and in China, delivering 93,000 electric vehicles is more than four times that of 2020. This year, which is regarded as the year of the ID. family's strength in the Chinese market, if it can achieve a leap in the Chinese market, then Volkswagen will no longer be so passive in the future electrification competition.
A better product mix and favorable pricing are key drivers of improved revenue quality. As a result, although Volkswagen Group's car sales fell sharply by 2.4 million units compared to 2019, about 600,000 units compared to 2020, the Volkswagen Group still achieved solid profits and profit margins, reflecting the correctness of the Group's development model and the effectiveness of the transformation.
2
Variables and opportunities in the new year
In addition to the main revenue data, as a sustainable and software-driven mobility provider, volkswagen Group is investing in expanding its capabilities in software development and autonomous driving, as well as expanding its battery electric vehicle product matrix.
As a result, R&D costs in the automotive sector increased by 12.2 percent to 1.56 billion euros in this context, with the proportion of R&D remaining at 7.6 percent. In terms of capital expenditures, the Volkswagen Group managed to reduce spending by more than 500 million euros to 1.05 billion euros. This corresponds to a 5.1% reduction in the ratio of capital expenditure to sales revenue.
In the face of the great waves of the times, only by constantly refreshing the technical bottleneck can we stand at the head of the tide. More technology updates mean more money spent on research and development. In particular, the automotive industry we are in is undergoing a deep-seated change, electrification and intelligence have become the trend of the times, and volkswagen has also come up with a radical transformation plan.
In December, the Volkswagen Group announced plans to invest a total of 159 billion euros over the next five years, of which 89 billion euros will be spent on technologies such as software and electric vehicles, accounting for 56% of the total investment. The 89 billion euros will be further subdivided, 52 billion euros will be used for electric transportation travel, 8 billion euros will be used for hybrid technology capital investment, and another 30 billion euros will be used for the development trend of intelligent and unmanned driving.
This encounters a huge problem, how to achieve such a huge capital demand? Relying solely on volkswagen group's current financing channels and profits, it is difficult to support such a huge plan. Therefore, the Volkswagen Group must find new solutions.
Thus, Volkswagen and Porsche have reached a framework agreement to ensure that The Jet will be listed independently.
Porsche's "IPO" is also considered to be an important part of the Volkswagen Group's fundraising for the new energy transformation. It is understood that the public may evenly distribute the share capital into preferred shares and common stock, and up to 25% of the preferred shares will be put into the capital market, which may bring tens of billions of dollars.
The Volkswagen Group expects that in 2022, product deliveries to customers will increase by 5% to 10% over the previous year and return on operating sales will reach 7.0% to 8.5%, given the continued challenging market environment. Of course, this is ideally assumed that COVID-19 will not break out again, and that shortages of intermediate products and commodities will become less severe.
However, due to structural shortages in semiconductors, the 2022 fiscal year will continue to be affected by supply shortages. Compared with the first half of the year, although it is expected that the semiconductor supply will improve in the second half of the year, the impact is real and will be long-term.
In addition, with the situation in Russia and Ukraine leading to the shutdown of assembly lines and supply chain disruptions in the automotive industry, automakers are busy finding alternative sources of key components produced in Russia and Ukraine from Places like China and Mexico. At this stage, it is also uncertain to what extent a potential escalation of this event will affect the growth of the global economy and automotive industry in fiscal 2022.
In the past few years, from the decline in brand power in the Chinese market to product transformation, from the impact of black swan events on the popularity of financial reporting data, volkswagen seems to have learned to better mitigate the impact of the crisis on the development of enterprises. In the future, with the deepening of electrification and the intensification of competition in the automotive industry, the Volkswagen Group has every opportunity to use these experiences and stay on track in a special period.
Li Sijia
Leader of the anti-parsley alliance and long-time occupier of the first floor of the commune