Volkswagen Group revenue grows 12.3% despite big sales drop

The Volkswagen Group’s profits grew in 2021, despite a significant decrease in vehicle sales exacerbated by semiconductor shortages and the pandemic. 

The firm, whose car brands include Volkswagen, Audi, Skoda and Seat, sold a total of 8.6 million vehicles in 2021, a drop of 6.3% year on year and 2.3 million fewer than in pre-pandemic 2019. 

In contrast, the group’s sales revenue rose 12.3% to €250.9 billion (£209.4bn) and operating profit almost doubled to €20 billion (£16.4bn). Overall earnings for the group before tax increased by 72.5% to €20.1bn (£16.8bn). 

“Over the past two years, we have learned to better mitigate the impact of crises on our company,” said Volkswagen Group chief financial officer Arno Antlitz. “I am confident that we will make the best possible use of these experiences to stay on track in these difficult times. 

“In 2021, we enhanced our overall robustness by achieving better margins, reducing overhead costs, lowering our break-even and keeping [capital expenditure] discipline. Our rewards were solid results and cash flows.

“At the same time, we made no compromise when it comes to future investments and moved ahead in becoming a sustainable, software-driven mobility provider.”

Much of the Volkswagen Group’s growth has been attributed to its continued focus on electric models. Deliveries of the group’s electric models, including the Volkswagen ID, Audi E-tron and Porsche Taycan families, almost doubled in 2021 to 452,900 units. 

The group’s 25% share of battery-electric vehicles in Europe makes it the market leader. It finished 2021 in second place in the US, with a 7.5% share, and sold 92,700 EVs in China, which was four times as many as in 2020. 

The firm has suggested that sales will rise this year if ideal conditions are met, but expects the various problems that have affected the industry to continue. 

“The 2022 fiscal year will continue to be affected by shortfalls in supply due to the structural shortage of semiconductors. The supply of semiconductors is anticipated to improve in the second half of the year, compared with the first half,” said Volkswagen.

Assuming the pandemic does not “flare up” and parts become more abundant, the firm has projected that deliveries will increase by between 5% and 10% compared with 2021. Meanwhile, sales revenue is expected to rise by between 8% and 13%. 

Russia’s invasion of Ukraine was also a concern, the firm said. “At the time of preparing this outlook, there is a risk that the latest developments in the war in Ukraine will have a negative impact on the Volkswagen Group’s business,” it said.