Volkswagen deliveries fall on China weakness, margin guidance cut

10th Jul 2024 11:32

(Sharecast News) - German car giant Volkswagen said vehicle deliveries inched lower in the first half as growth was held back by declines in China and the rest of Asia, just one day after it lowered its margin forecasts for the full year.

The company delivered 4.35m vehicles worldwide in the six months to 30 June, down 0.6% on the 4.37m reported the year before.

Growth in North America (+8%), South America (+15%), Western Europe (+2%) and Middle East/Africa (+2%) was unable to offset declines in China (-7%), the wider Asia-Pacific region (-16%) and Central and Eastern Europe (-1%).

"As announced, we have deliberately prioritised sustainable value creation over higher volumes in the highly competitive environment in China in order to achieve our long-term strategic goals," said Hildegard Wortmann, a member of VW's extended executive committee for sales.

Across 2024 as a whole, VW still expects a "slight increase" in global deliveries, helped by the launch and ramp-up of new models in the second half.

Late on Tuesday, the company said it was reducing its guidance for operating return on sales to 6.5-7.0%, down 50 basis points on previous forecasts, due to the potential closure of an Audi plant in Brussels. The impact is expected to lead to a "total burden on the operating result" of €2.6bn this year.

Across the manufacturer's 'Brand Group Core' division - which includes VW passenger cars, Škoda, SEAT/CUPRA and VW commercial vehicles - worldwide sales were up 2.3% at 3.19m in the first half.

However, the 'Brand Group Progressive' categories - comprised of premium brands Audi, Bentley and Lamborghini - saw deliveries fall by a combined 8.2% to 844,000, while the luxury Porsche division dropped sales by 6.8% to 155,900. The trucks and TRATON department also reported a weaker period, with deliveries falling 4.8% to 160,100 overall.