Last July, the Volkswagen Group unveiled the NEW AUTO strategy, which proposes to transform the Group into a sustainable provider of software-driven mobility services by 2030. As the backbone of the Volkswagen Group, the Volkswagen brand also released the ACCELERATE strategy.
In the past year, in the face of the double blow of the epidemic superimposed chip, both the Volkswagen Group and the Volkswagen brand have handed over a bright answer. With the support of system capabilities, Volkswagen's core business transformation has been steadily advancing. As Volkswagen's most important single market in the world, Volkswagen China's localization R&D capabilities have also made great progress.
Before the lack of core difficulties, Volkswagen escorts luxury and electric vehicles
In 2021, the world's major car companies are greatly challenged by the lack of chip supply. As one of the world's largest automotive groups, Volkswagen Group's sales fell 6.3% y/y to 8.6 million units.
Despite the decline in sales, the Group's full-year sales revenue bucked the trend by 12 percent to EUR 250.2 billion. Operating profit, excluding expenditure on special projects, nearly doubled from last year to €20 billion. Return on operating sales, which excludes special project expenses, also increased to 8 percent from 4.8 percent in the previous fiscal year.
Among them, the largest Volume Volkswagen brand passenger car revenue reached 76.127 billion euros, up 7.1% year-on-year; operating profit reached 2.503 billion euros, a year-on-year increase of 451.32%.
Volkswagen was able to achieve rapid growth in sales revenue and profit margins in the face of declining sales, mainly due to the significant increase in the proportion of sales of high-end models with higher profit margins under the Volkswagen Group.
By brand, Volkswagen brand passenger cars delivered 4.8969 million new cars worldwide, down 8.1% year-on-year; Audi brand delivered 1.6805 million new cars worldwide, down 0.7% from the same period last year; Porsche brand delivered 301,900 new cars worldwide, up 10.9% year-on-year; and Bentley brand delivered nearly 14,700 new cars worldwide, up 30.8% year-on-year.
In particular, it is worth mentioning that the volkswagen group's electric vehicle delivery volume has also shown a rapid increase of 452,900 units, and the number has nearly doubled. In the European market, Volkswagen leads the European electric vehicle market with a 25% market share; in the United States, Volkswagen ranks second in the US market with a market share of about 7.5% and in the Chinese market, Volkswagen also delivered 92,700 pure electric vehicles, more than four times the delivery volume in fiscal 2020.
Therefore, from the overall sales situation, Volkswagen will first use its limited chip resources to ensure that Porsche, Bentley and Audi are more profitable models. At the same time, in order to ensure the achievement of the NEW AUTO strategy, the chip resources required for electric vehicles have also been tilted.
According to Volkswagen's estimates, if the chip supply crisis can be alleviated, the Volkswagen Group's product deliveries will increase by 5% to 10% compared with 2021 in 2022, and sales revenue will increase by 8% to 13% year-on-year. In terms of operating profit, the Group's return on operating sales is expected to be between 7% and 8.5%.
The NEW AUTO strategy is advancing in an orderly manner
NEW AUTO strategy: By 2030, the Group will transform itself into a sustainable provider of software-driven mobility services.
At present, with the help of the MEB platform, Volkswagen has begun to rapidly launch electric vehicle models to the global market, and has built a relatively complete electric vehicle matrix in a very short period of time. The ID.Buzz, which was just released not long ago, also received relatively positive market feedback.
But for the MEB platform, Volkswagen hopes that this platform will not only be used to help it launch new models, but also hope that MEB can become the industry standard. Opening up the MEB platform to the outside world means that Volkswagen can further reduce costs and dilute previous R&D investment. The launch of 1.2 million electric vehicles based on the MEB platform over the next six years, including companies like Ford, will further consolidate the strategic position of the MEB platform in the global electric vehicle market.
However, as the saying goes, "cats don't teach tigers to climb trees." While Volkswagen developed the MEB platform with Ford, it put more effort into the SSP platform.
This new platform will integrate the three fuel vehicle platforms of MQB, MSB and MLB and the two electric vehicle platforms of MEB and PPE, and maximize the platform synergy effect of Volkswagen by maximizing the common performance of the platform. The first model on the SSP platform, the Trinity, will be available in 2026. The model has significantly reduced charging times, a range of more than 700 kilometers, and is equipped with the volkswagen group's most advanced software, which technically supports L4 autonomous driving.
In order to coincide with this SOP time node, Volkswagen invested 800 million euros in the construction of an R&D center focused on the development of the SSP platform, and on the other hand, Volkswagen invested 2 billion euros to build a new process-optimized SSP plant next to the main plant in Wolfsburg.
Another point that has to be mentioned is that in order to match the ambitious electric vehicle plan, Volkswagen plans to build 45,000 high-power charging terminals worldwide by 2025. Among them, in Europe, China and the United States factories, Volkswagen will cooperate with local companies to complete the layout of charging terminals in less than 4 years under the condition that 10,000 terminals have been invested.
As a pioneer in Volkswagen's transformation, CARIAD is also gradually on the right track, becoming Volkswagen's main carrier in the era of software-defined vehicles.
In the field of autonomous driving/driver assistance, CARIAD has successfully integrated Hella's camera software business and cooperated with Bosch to develop L3-level autonomous driving technology. In 2022, CARIAD will further optimize the customer experience through OTA pushes including the launch of the new full-journey driver assistance system 2.5, plug-and-play functionality, multi-point route planning, and upgraded voice control. In particular, through the partnership with Mobileye, Volkswagen's full-journey driver assistance system technology is already in a leading position in the European market.
On mobility, Europcar's acquisition-related deal could be completed in Q2 this year. In this area, autonomous vehicle fleets will be the highlight of the entire mass mobility. With the help of the newly unveiled ID.Buzz and the software of its ARGO AI, ID.Buzz has already conducted road tests of autonomous driving functions in Munich.
In 2023, the relevant tests will be extended to the US market, and in 2025, Volkswagen will launch a commercial autonomous driving carpooling service in Hamburg, Germany, in order to achieve the full implementation of Volkswagen's autonomous driving technology in the mobility industry.
The Chinese market has become an important fulcrum for Volkswagen's transformation
If the NEW AUTO strategy is to be successfully achieved, the Chinese market is the key to it.
According to Volkswagen's plan, by 2030, its market share in the new energy vehicle market will increase to the same as that of fuel vehicles. Compared with the European and American markets, the Chinese auto market, especially the electric vehicle market, is more competitive. Although the new energy vehicle segment has the fastest growth rate in the domestic automotive market, more than 100 products are on sale at the same time, so that the competition in the entire market has shown a white-hot state.
For Volkswagen, strengthening local R&D capabilities is the key to ensuring Volkswagen's competitiveness in the domestic electric vehicle market.
On the one hand, as Volkswagen participates in the share reform process of Jianghuai Automobile, Volkswagen will further deepen the R&D capabilities of Volkswagen (Anhui) and become the key to Volkswagen's ability to better face the constant changes in China and the increasingly fierce market competition.
At present, Volkswagen already has a R&D team of more than 6,000 people in China. By better interpreting the demands of local consumers, helping Volkswagen to occupy the largest market share in the era of fuel vehicles will also become the key to victory in the era of intelligent electric vehicles. For Volkswagen China, as the shortage of chip supply eases, the ID continues to expand. City Showroom & ID. Agent and offer OTA remote upgrade feature, ID. The series of models in the domestic market is expected to return to the possibility of previous high-speed growth.
On the other hand, CARIAD, which occupies an important position in Volkswagen's global layout, will continue to expand its team in China.
In the near future, the CARIAD team in China will double the number of existing 600 engineers to support software localization. With OTAs, whether it's fixing software flaws and unlocking entirely new features, or upgrading autonomous driving-related capabilities, a strong CARIAD team is key to success.
At last
In 2022, the global chip supply shortage is expected to be alleviated, but an unexpected Russo-Ukrainian war has cast a shadow on the recovery of the global economy, especially in Europe.
For a company with such a large volume as Volkswagen, the transformation process will inevitably encounter various difficulties and resistances, and the adjustment of the organizational structure, the restructuring of personnel positions, and the expenditure of a large amount of capital will face the possibility of rebound and failure at any time.
However, if Volkswagen does not transform, it will not only be pulled away by Tesla, but also may be surpassed by other new car companies. So this transformation is not only a war that Dies personally, but also the entire German public cannot afford to lose, nor can it lose.
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