Every so often, we like to catch up with our favourite automotive giant, the Volkswagen Group. After all, as an independent South Wales garage specialising in servicing, repairing and MOTing VW Group cars, we have a vested interest in how they’re doing.
In any industry, big challenges can create new winners and losers – and car manufacturers have been facing more than their fair share of crises. So how’s VW been coping?
VW’s scary headline figure
Last month, VW Group released their 2022 delivery results. There was one eye-catching statistic that was splashed all over the motoring, business and wider press: deliveries were the lowest that VW Group had achieved in a decade.
Variations on the same headline were posted on Reuters, Euronews, US News, Automotive News, the Wall Street Journal (no, we’re not linking all those!) and many more. Just to stick the boot in, Bloomberg went one better and pointed out it was actually an eleven year low.
You don’t need to be a business genius to figure out why: it’s mainly down to those persistent supply chain issues, now exacerbated by the war in Ukraine.
However, before we all start crying into our Krombacher, there’s more to VW’s financial story than that.
Sales and profit actually went up
Despite delivering fewer vehicles in 2022, VW Group actually increased both their sales (250.2 billion to 279 billion euros) and profits (20 billion to 22.5 billion euros) from the previous year. In fact sales were up a huge 14.3% in the fourth quarter, partly down to new car price increases. It’s not the first time we’ve seen this, with management figuring out ways to reduce costs and better meet customer demand.
As we can see, the company’s hardly down for the count. For the past three years, it’s taken second place to Toyota as the biggest motor manufacturer in the world — and therefore, it’s still a monster of a corporation with huge sales and profits.
And talking about Toyota…
VW catching the electric wave
When it comes to electric vehicles, the world’s two largest motor manufacturers couldn’t be more different. Several years back, VW jumped into electrification with both feet, announcing ambitious electric plans for its whole range. And Toyota? The creator of the groundbreaking Prius effectively said “meh, all this electric stuff will blow over.” In fact, as recently as October 2022, CEO Akio Toyoda once again struck a cautionary note about EVs, and the company still has modest EV targets.
Meanwhile, worldwide EV sales increased by 55% in 2022, already accounting for 10% of all global car sales last year. Toyota is now the only major manufacturer sticking to a dip-your-toe-in-the-water strategy. And that’s got to be good news for rivals Volkswagen, who already have serious skin in the EV game.
The Driven has put together some interesting stats on VWs electric progress:
- Since September 2020, VW have built over 580,000 MEB cars based on their MEB electric platform.
- VW Group’s BEV sales were up by 23.6% compared to 2021, around 330,000 vehicles worldwide.
- The ID.4 is VW’s best-selling model, bringing in 170,000 sales worldwide.
Now, fair enough, these figures are just a fraction of VW’s output (though the ID4 already makes up 18% of VW’s US sales). The point is that over the next few years, it would be a brave man who would bet against VW’s electric strategy.
VW Group still make awesome cars
Putting all the numbers to one side, there’s a more basic question we can ask about the VW Group brands: do they make awesome cars that people love?
The short answer is yes.
Take Skoda, for example. Hardly a year goes by without the Czech stalwarts clinching some big Auto awards title. In the annual readers’ poll for the German motoring magazine Auto Motor und Sport this year (with over 100,000 respondents), the ‘Best Car’ winner was the Skoda Octavia. Again. It’s the tenth time in a row that it’s won. As a famous orange president once put it, “you’ll get bored with winning.”
So, whatever the vagaries of the current market, Audi, Volkswagen, Skoda and a host of luxury marques (Bentley, Lamborghini, Porsche, etc) continue to be some of the most visible and best-loved vehicle brands.
You’ll notice that we didn’t include SEAT on that list. Not that they’re not just as well-known and appreciated as some of the others, it’s just that rumours have been swirling about VW Group canning the brand before too long. These days, it’s all about the sexy new sibling Cupra. VW Group has denied this, but their support seems a bit lukewarm. Or is that just us? Sounds like one for another blog post.
The WVS blog covers a wide range of automotive topics, from the contentious to the light-hearted. We are an independent garage specialising in the VW group marques, including Audi, Volkswagen, Skoda and SEAT. WVS provides services, repairs and MOTs, delivering a main dealer level of care at affordable prices. To book your vehicle in, or for any enquiries, get in touch.