A man polishes a Volkswagen ID GTI concept car on display at the International Motor Show (IAA) in Munich, southern Germany on September 5, 2023.
Christophe Stach | AFP | getty images
German carmaker Volkswagen said on Tuesday its operating profit fell 20% in the first quarter as sales declined due to weak demand for its premium brands.
The company said operating profit in the first three months of 2024 stood at 4.6 billion euros ($4.9 billion). Operating profit in the same period of 2023 was 5.7 billion euros.
Volkswagen cited lower sales and higher fixed costs as well as “unfavorable country, brand and model mix” as key factors in the profit decline.
The company said vehicle sales declined 2% to 2.1 million units in the first quarter.
“As expected, our first quarter results reflect a slow start to the year,” Volkswagen Group CFO and COO Arno Antlitz said in a statement.
Operating profit at the carmaker’s luxury brand Porsche fell to 1.2 billion euros in the first quarter of 2023 from 1.7 billion euros. The unit sold 71,000 vehicles globally in the first quarter, down 16% from 85,000 vehicles sold in the same year. Last year’s period.
Volkswagen said the lower volumes were related to product development as well as customs-related delays.
Volkswagen still expects to reach its 2024 financial targets, which include sales revenue growth of 5% and full-year operating margin between 7% and 7.5%.
“We expect additional momentum during the year from the launch of more than 30 new models across all brands, and the impact of our efficiency programs will gradually become apparent as the year progresses,” Antlitz said.
Volkswagen’s European-traded shares were down 2.6% at 9:00 a.m. London time.
