Volkswagen Group, one of the world's largest automakers, has announced a remarkable growth in revenue and operating profit in the first quarter of 2023. The company credited the impressive results to its successful electrification strategy, improved cost efficiency, and favorable market conditions.
According to the company's press release, Volkswagen Group's revenue in the first quarter of 2023 was €67.3 billion ($76.8 billion), up 14.6% from €58.7 billion ($66.9 billion) in the same period of 2022. The operating profit before special items was €5.6 billion ($6.4 billion), up 75.7% from €3.2 billion ($3.6 billion) in the first quarter of 2022. The operating return on sales before special items was 8.3%, up from 5.4% in the previous year.
The special items in the first quarter of 2023 were related to the diesel issue and amounted to €0.4 billion ($0.5 billion), compared to €0.6 billion ($0.7 billion) in the first quarter of 2022. The operating profit after special items was €5.2 billion ($5.9 billion), up 86.7% from €2.8 billion ($3.2 billion) in the first quarter of 2022.
The net cash flow in the automotive division was €3.1 billion (3.5 billion), up from €−1.5 billion in the first quarter of 2022. The net liquidity in the automotive division was €29.6 billion ($33.8 billion), up from €26.8 billion ($30.6 billion) at the end of 2022.
Volkswagen Group's electrification strategy has been paying off, as the company delivered more than 422,000 battery-electric vehicles (BEVs) and plug-in hybrid vehicles (PHEVs) in the first quarter of 2023, up 158% from 163,000 in the first quarter of 2022. The share of BEVs and PHEVs in the total deliveries was 12%, up from 5% in the previous year.
The company's flagship electric vehicle, the Volkswagen ID.4, was launched in Europe and China in late 2022 and in the U.S. in early 2023 and has received positive feedback from customers and media alike. The Volkswagen ID.4 was also named the World Car of the Year by a panel of international automotive journalists.
Other electric models that contributed to Volkswagen Group's strong performance include the Audi e-tron GT, the Porsche Taycan Cross Turismo, and the Skoda Enyaq iV.
The company also announced that it will launch more than 20 new electric models by 2025, including the Volkswagen ID.Buzz, a modern reinterpretation of the iconic Microbus, and the Audi Q4 e-tron, a compact SUV with a range of up to 520 kilometers (323 miles).
Cost Efficiency and Market Conditions
Volkswagen Group has also improved its cost efficiency and profitability by implementing various measures, such as reducing fixed costs, optimizing material costs, increasing productivity, and enhancing synergies among its brands and regions.
The company also benefited from favorable market conditions in the first quarter of 2023, especially in China, its largest single market, where it delivered more than 1 million vehicles, up 61% from 621,000 in the first quarter of 2022.
The company also saw strong demand for its premium and luxury brands, such as Audi, Porsche, Bentley, and Lamborghini, which achieved record deliveries and profits in the first quarter of 2023.
Volkswagen Group is optimistic about its prospects for the rest of 2023 and beyond, as it expects to increase its global market share and achieve higher revenue and operating profit than in 2022.
The company also reaffirmed its commitment to becoming a global leader in electric mobility and digitalization, as well as achieving carbon neutrality by 2050.
Volkswagen Group CEO Herbert Diess said: "We have started the year with great momentum and are on a strong operational course. This is clearly reflected in our positive quarterly figures. We are making good progress with our transformation into a software-driven mobility company."