The Volkswagen Group has not broken into the 10 million-unit annual sales club for some years. As one of the world's "one of the best" traditional automobile giants, Volkswagen Group, Toyota Motor, General Motors, etc. are among the few large groups that have achieved global annual sales exceeding 10 million, representing the ceiling of the automobile industry.
In recent years, except for the annual sales of 10.9746 million vehicles in 2019, the Volkswagen Group has never returned to the level of annual sales of tens of millions of vehicles. It rained all night and the sales fell. The Volkswagen Group has been surpassed by Toyota for four consecutive years. The new industry pattern of "Toyota first, Volkswagen second" hangs over Wolfsburg like a dark cloud.
Against the trend, the Volkswagen Group decided to do something.
Recently, the Volkswagen Group's 2024 annual press conference was officially held. During the press conference, Volkswagen officials not only showed the financial situation and future vision of the group and its brands, but also brought the latest future product plans.
According to official news released by Volkswagen, the Volkswagen Group plans to launch more than 30 new or modified models in 2024, covering multiple brands. These include new Porsche models such as the Macan EV, new Audi models such as the Q6e-tron, new Volkswagen models such as the ID.7, Passat, and Tiguan, and new Skoda models such as the Superb.
According to the plan, driven by new models, the Volkswagen Group will achieve a global sales growth of 3% in 2024.
At the same time, the Volkswagen Group plans to bring 11 new electric vehicles by 2027. In addition to the already confirmed ID.BUZZLWB, ID.7, ID.7Tourer, ID.GTIConcept, and ID.2all models, it will also bring ID.2all SUV, entry-level E-Volkswagen, ID.4PA, A-MainSUVe, and two products jointly created with Xpeng in the future.
This means that if the plan goes well, we can see the launch of 11 new electric vehicles from Volkswagen in the next four years. Together with the ID.3, ID.4, ID.6 and related sister models currently on sale, the Volkswagen ID. family will become even larger, Volkswagen's electrified products will be more abundant, and Volkswagen's competitiveness on the new track will be even stronger.
It is not difficult to see from future product planning that Volkswagen is becoming more and more radical on the road to new energy transformation.
Whether it is the fast pace of new product releases or the large number of products, Volkswagen's pace towards the new energy track is comparable to that of China's mainstream car companies, let alone other traditional fuel giants. It can be said that Volkswagen has further bet its future on electrification.
Therefore, in the future, with the goal of returning to tens of millions of vehicles and surpassing Toyota to become the world's number one, Volkswagen will become more and more dependent on electric vehicles, and Volkswagen electric vehicles will play a greater role in market competition. This is an important decision made by Volkswagen against the trend.
Determined to be electric and not relax
In fact, before this, Volkswagen Group has been the most radical transformation among many traditional car manufacturers. From the group's strategic decisions to the active expansion of major electrification departments, to the successive launch of products, Volkswagen Group has "installed" battery power on the basis of fuel engines to drive the giant ship into the future.
Last year, Volkswagen stated at a press conference that it planned to invest 180 billion euros (approximately RMB 1,326.5 billion) in battery production, software and digitalization in the Chinese market, and expanding business in North America over the next five years.
Therefore, this year we have seen the reveal of new products such as Volkswagen ID.7, the reconstruction of the CARIAD department, the establishment of new software companies, and the cooperation between Volkswagen and Xpeng Motors...
Such resolute radicalism is unmatched by any traditional giant. Because most of them, facing the torrent of the new era, are unwilling to join the new track and give up the dividends of the old era. So why did Volkswagen go further on its already radical path? Especially when the whole of Europe is currently in a wait-and-see atmosphere about vehicle electrification.
The answer lies in last year's financial report.
In 2023, the Volkswagen Group will deliver 9.24 million new cars globally, a year-on-year increase of 12%. Among them, 771,000 pure electric vehicles were delivered, a year-on-year increase of 35%. The sales of pure electric vehicles accounted for 8.3% of the Volkswagen Group's internal deliveries, while this figure will be 6.9% in 2022. In the view of CEO Obermu, this gives the Volkswagen Group an advantageous position in the transformation process.
The growth of both total sales and pure electric models will boost the Volkswagen Group's full-year performance in 2023.
Data shows that in 2023, the Volkswagen Group's sales revenue will reach 322.3 billion euros, a year-on-year increase of 15%. Sales revenue in the fourth quarter reached 87 billion euros, and operating profit increased by more than 25% year-on-year. Among them, the growth of the profit indicator exceeded expectations, with net profit after tax increasing from 15.8 billion euros in the previous year to 17.9 billion euros, an increase of approximately 13%.
Overall, Volkswagen's operating profit remained at 22.6 billion euros, almost the same as in 2022; the operating profit margin excluding special items was 7.0%, down from 8.1% last year. Specifically for the automotive business unit, its net cash flow in 2023 will increase to 10.7 billion euros, more than double the 4.8 billion euros last year.
The improvement in key data in the financial report shows that although electrification transformation is a long-term "money-burning" transaction, Volkswagen still maintains solid performance with its good product mix and price strategy, which gives Volkswagen the confidence to further increase its electrification. In addition, the delivery volume of pure electric models has increased year by year, making Volkswagen even more committed.
Ten years ago, Volkswagen announced its new energy plan. In 2023, this global automobile giant will complete its first decade of transformation. At this point of connecting the past and the next, Obomu clearly pointed out the direction for the future of the Volkswagen Group - "Volkswagen's transformation process will continue for 10 years.
At the same time, for the performance in 2023, Obomu attributed it to the reorganization of the management structure. The most concerning thing is that the Volkswagen Group has implemented strict performance appraisals, set performance goals for all its brands, and emphasized that "all goals can be measured." The purpose of assessment is to continuously improve profits.
Obermu said: "In 2023, after restructuring, all goals have been achieved, and some goals have been completed ahead of schedule." As for how to continue to increase earnings in the future, including sales, profits and even brand influence, the Volkswagen Group has also given plans.
Keep betting on China
As the primary strategic core regional market of the Volkswagen Group, China has been Volkswagen's largest automobile market in the world since 2009. It is also the largest single market for many brands of the Volkswagen Group. The importance can be imagined.
Last year, Volkswagen sold 191,800 pure electric vehicles in China. Although it increased by 23.2% year-on-year, from a macro perspective, my country's new energy vehicle sales in 2023 will be 9.495 million units, and Volkswagen's new energy vehicles accounted for only 2%. Although this data makes it the "hope of the whole village" for new energy vehicles in joint ventures, its competitiveness is far less than that of BYD, Tesla and other leading new forces.
Therefore, regardless of the importance of the Chinese market or Volkswagen's current low competitiveness in China, the Chinese market is undoubtedly the focus of Volkswagen's future investment.
In this financial report, Volkswagen Group also made it clear that it will increase its focus on the Chinese market. It even introduced Volkswagen China as a separate unit, parallel to Volkswagen Passenger Cars, Audi, Porsche and other brand units. In the previous "Ten Point Plan" proposed by the Volkswagen Global Board of Directors in 2023, China also ranked third, second only to planning and products, which shows that it attaches great importance to China.
Not only that, judging from Volkswagen's continuous launch of new ID. family products into the Chinese market, the establishment of CARIAD China software company, and its cooperation with Xpeng Motors, in the future Volkswagen's investment in China will no longer be limited to building factories and introducing new products, but also establishing research centers here and establishing separate R&D centers with local Chinese manufacturers and Internet technologies to increase core competitiveness.
It is worth mentioning that in 2023, China will also become the market with the fastest electrification and intelligent reform of the Volkswagen Group.
Data shows that Volkswagen will deliver 191,800 pure electric vehicles in China in 2023, a year-on-year increase of 23.2%, accounting for 25% of the group's global pure electric sales. This is due to Volkswagen Group’s electrification and intelligent layout in China. It is worth mentioning that the Volkswagen Group has defined Volkswagen Anhui as the only R&D center in the world focused on the transformation of intelligent connected vehicles.
Just one day before the Volkswagen Group released its performance report, JAC Motors announced that JAC and Volkswagen China planned to increase their investment in Volkswagen Anhui by RMB 6.5 billion in the same proportion to promote the acceleration of electrification transformation in China. By 2030, the Volkswagen Group will provide at least 30 pure electric models in the Chinese market and become China's leading intelligent connected car manufacturer.
Among the Volkswagen Group's series of measures for the Chinese market, the most talked about is undoubtedly its cooperation with Xpeng Motors.
Last year, Volkswagen announced a partnership with Xpeng to create two Volkswagen-branded models specifically developed for the Chinese market. The two parties will purchase shared vehicle and platform parts through a joint procurement plan. Through joint procurement and the application of innovative technologies in the vehicle design and engineering stages, the product development cycle will be shortened by more than 30%.
Thanks to the cooperation with Xpeng, Volkswagen has the opportunity to make full use of the development potential of China's new energy market and enrich its product lineup. According to the latest news, the vehicle products jointly created by Volkswagen and Xpeng are currently named VW/Xpeng1 and VW/Xpeng2. The first model will be an SUV and is planned to be launched in 2026.
Currently, Volkswagen aims to increase its share of the domestic electric vehicle market to 26% and plans to launch more models in cooperation with Xpeng.
Of course, competition in the Chinese market is becoming increasingly fierce, and uncertainty about the future is also increasing. Therefore, Volkswagen said it is also prepared for the continued shrinkage of sales in the Chinese market. Volkswagen said it is setting its sights on North America to drive sales growth and believes that North America has the potential to become Volkswagen's largest growth market.