Car giants Audi and Porsche encounter issues with visual enhancements
Volkswagen, the multi-brand group based in Wolfsburg, is set to release its second-quarter financial results next Friday, with the event taking place in Hamburg. The financial results being discussed are expected to include restructuring and customs issues in the forecast for EBIT.
The automaker's first-quarter financial results demonstrated a strong start, with significant unit sales and sales revenue growth for the Volkswagen brand group, including Škoda, SEAT/Cupra, and Volkswagen Commercial Vehicles. The sales revenue increased substantially to around €35.3 billion in Q1, driven by robust growth in all-electric vehicle deliveries. However, profitability took a hit due to provisions for CO₂ regulations in Europe, diesel-related issues, and inventory write-downs related to U.S. import duties.
Electric vehicle (EV) deliveries continue to be a key driver. In the first half of 2022, Volkswagen's battery electric vehicle (BEV) deliveries rose 47% year over year to 465,500 units globally. The U.S. market showed mixed results with a slight decline in Q2 EV deliveries despite a 24.3% increase for the first half year overall. Across all brands and powertrains, the group delivered 2.27 million vehicles in Q2.
Europe, VW’s largest EV market, posted robust BEV growth of nearly 73% year over year in Q2, while China saw a 32.6% drop in EV deliveries in the same period. Audi and Porsche are likely to be burdened by depreciation and restructuring costs in the second quarter of 2022.
The second-quarter figures, reflecting strong EV sales momentum but challenges in certain regions and profitability pressures, will be closely watched as a signal of how well Volkswagen can sustain earnings growth for the full year. The Q2 results will be a crucial factor in shaping market expectations ahead of Volkswagen’s earnings report scheduled for August 7, 2022.
Despite the challenges, the group has positive vehicle deliveries after the first half of the year, unlike last year. The expected operating margin for Volkswagen in the second quarter of 2022 is 4.6%. Jefferies analysts forecast an operating result (EBIT) of 3.8 billion euros for Volkswagen in the second quarter.
Given this context, the second-quarter figures, exposing some regional challenges and cost pressures that could moderate profitability and impact full-year earnings forecasts, will be closely scrutinised by investors and analysts alike.
The second-quarter financial results, expected to be revealed by Volkswagen next Friday, might showcase a continuation of the group's robust electric vehicle sales momentum, while also highlighting potential regional challenges and cost pressures that could affect profitability and full-year earnings predictions. These results, consequently, will be of great interest to both investors and analysts in the automotive, finance, and transportation industries.
