Volkswagen Brand Posts Higher Margin as Audi Profit Falls — Update
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By David Sachs
Volkswagen Group reported lower operating margin and profit for its Audi brand group but its flagship division increased profitability.
The German carmaker said Audi posted operating return on sales of 9% in 2023 compared with 12.3% in 2022. Operating profit decreased to 6.3 billion euros ($6.89 billion) from EUR7.6 billion. The group includes Audi, Lamborghini, Bentley and Ducati.
Adjusted for commodity hedging and currency effects, operating profit reached EUR7.7 billion for a return on sales of 11%, Volkswagen said.
Sales revenue for Audi rose 13% to EUR69.9 billion.
Volkswagen's core brand group reported a 2023 operating margin of 5.3%, up from 3.6%, on a jump in revenue, the group said. Sales rose 21% to EUR137.8 billion. The brand group includes Volkswagen, Volkswagen Commercial Vehicles, Skoda, Seat and Cupra.
Cariad, Volkswagen Group's software arm, posted an operating loss of EUR2.4 billion. The result stemmed from the division's business model, which includes advanced payments for future software architecture, the company said. Revenue from software licenses rose by about 30% to EUR1.1 billion, it said.
Volkswagen said that PowerCo, the company's battery business, recorded an operating loss of EUR400 million and a net cash outflow of EUR800 million.
"This relates to investments in the Group's battery activities, which are essential for the successful ramp-up of electric vehicle production," Volkswagen said.
The financial services division posted an operating profit of EUR3.8 billion, down from EUR5.6 billion in 2022 on lower used-car sale prices after a spike caused by the chip shortages in 2021 and 2022.
The company also said it will now aim to achieve a carbon-neutral balance sheet at its production sites worldwide by 2040, 10 years ahead of the previous goal.
Write to David Sachs at david.sachs@wsj.com
(END) Dow Jones Newswires
March 13, 2024 03:44 ET (07:44 GMT)
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