Record profits for VW despite Dieselgate 14 | 03 | 2017
VOLKSWAGEN HAS PLEDGED to become a “market leader” in next-generation ‘solid-state’ battery technology. The new aim was confirmed by CEO Matthias Muller, who was speaking today as the firm confirmed a record-breaking sales year in 2016.
Speaking at the annual VW Group press conference, the car manufacturer revealed that its 2016 profits were €7.1billion (£6.2bn) from sales revenues of more than €217bn. The profit was achieved despite £5.6bn of losses to cover Dieselgate costs.
Muller stated the Group was “back on track” after the Dieselgate nightmare, and stressed the company must continue to push ahead with its “Strategy 2025”, a programme of efficiency gains and a restructuring to allow the company to make new-model decisions more quickly.
“The last year was challenging yet remarkably successful,” Muller (pictured) said. “In 2016 we set the course for the biggest transformation in the history of the company, while at the same time performing better in our operating business than many thought possible. Volkswagen is back on track.”
And the VW Group boss was adamant that the latest success will be a catalyst for further change.
“We will still be one of the most successful automakers in 2025,” he stated. “But we will also be a leading international provider of sustainable mobility and set the standard for new mobility services.”
On of the principal new initiatives is taking leadership in the field of battery technology by 2025, when the VW Group has committed to have solid state batteries in production. VW Group has committed to have 30 battery-electric vehicles on sale by 2025. Solid state batteries are seen as the next technological step over the lithium ion batteries currently favoured by most manufacturers.
Muller also identified the fact Audi will lead the Group’s autonomous driving projects. Currently the Group has 37 centres around the world working on autonomous and digital service ideas.
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“Volkswagen is becoming faster, more focused and more customer-driven,” he continued. “This will allow us to leverage the strengths of our multi-brand group much more effectively than in the past and to develop new and fascinating mobility solutions.”
The VW boss also revealed a new partnership with Indian giant Tata, aimed at delivering a new range of budget cars for the continent. The Group is also working on various projects in China.
“Together with Tata Motors, we plan to develop budget cars for the Indian market,” Muller explained. “Our colleagues at Skoda are leading the planned alliance for the Group.
“In China, we are working on an economy car with FAW, our long-standing joint venture partner. We are also in the advanced stage of negotiations with JAC to cooperate in putting inexpensive electric cars on the road in the Chinese market.
“We regard battery technology as another future core competence. In recent months we developed and approved a concrete phased plan to achieve technological leadership in Europe by 2025.”
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Across the VW Group, most of the company’s brands made healthy surges in profits. Skoda’s operating profit was up by almost a third in 2016, to €1.2bn (£1.05bn), while SEAT made a profit of €153million (£134m) in the same period.
Bentley stayed close to its 2015 figure, at €112million (£98m), as a result tougher market conditions and the costs of launching the Bentayga SUV. The company did though see a 6.4% rise in sales over 2015 to 11,300 units.
Porsche remained the Group’s biggest profit maker, with €3.9bn (£3.4bn), an increase of 14%.
However, Audi saw profits dip slightly, primarily because of new-model launch costs (likely to include the Q2 and Q5) and a Dieselgate bill of €1.8bn (£1.4bn). Despite that, it still returned a profit of around €3bn (£2.6bn).
Not surprisingly, the worst-hit of the Group’s brands by Dieselgate was Volkswagen. It saw sales revenue fall by 0.6% to €105.7bn (£92.6bn), with a profit of €1.9bn (£1.6bn).
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Jim McGill