Sales revenue rose 22% to 76 billion euros in the first quarter, Volkswagen said, driven mainly by improved sales volumes in Europe and North America.
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german giants Volkswagen On Thursday reported a decline in first-quarter profits, weak sales in China reaffirmed the carmaker’s need to close the gap on its rivals in the country’s fast-growing electric vehicle market.
Volkswagen said operating profit fell 31% to 5.7 billion euros ($6.3 billion) in the first three months of 2023, down from 8.3 billion euros in the same period last year.
Europe’s biggest carmaker said operating profit before valuation effects from commodity hedging rose 35% to 7.1 billion euros.
Sales revenue rose 22% to 76 billion euros in the first quarter, Volkswagen said, driven mainly by improved sales volumes in Europe and North America.
“The year 2023 actually got off to a pretty encouraging start in both revenue and underlying operating profit,” Volkswagen Chief Financial Officer Arno Entlitz told CNBC’s Annette Weisbach on Thursday.
“As you remember when we released our targets for 2023, they were quite ambitious, we got this feedback, but based on that very solid first quarter and an order backlog of 1.8 million cars in Europe, We are very confident that we will achieve all our financial targets for 2023.”
Shares of Volkswagen were marginally higher on Thursday morning. The stock price is up about 5.5% year-to-date.
Volkswagen said deliveries in China slipped 14.5% during the first three months of 2023, but it is confident that sales will recover through the rest of the year, citing an expanded model range and China-specific technology.
When asked about the decline in first quarter sales in China, Volkswagen replied to Entlitz, “We got off to a slow start in China.”
He said it was important to distinguish between China’s combustion engine market, where Volkswagen has long been a leader, and the country’s battery electric vehicle (BEV) market, where it seeks to catch up to rivals including the Chinese EV giant. BYD,
“I just got back from Shanghai, I spent three days looking at competitive cars, talking to the teams on the ground and clearly need to get up to speed on the BEV side,” Entlitz said.
“I believe we will also play a major role in China in the future,” he said.
