Volkswagen Group stays on track in challenging environment and expects improved margin in the second half of the year

“The realignment of Volkswagen Group over the past three years is delivering results. Throughout the group. For the full year, we expect a robust performance above the prior year in a challenging environment – even though our operating result in the first half was around 12 percent below the prior year. Globally, we delivered more cars than in the previous year – excluding the Chinese market, which slumped by 20 percent. Our order book also reflects a positive trend: more than 70,000 orders for our new Electric Urban Car Family around the ID. Polo in just a few weeks – and orders for all-electric vehicles in Europe increased by more than 50 percent in the second quarter. Our products are achieving top scores in comparative tests, awards, and quality studies. Applying disciplined cost managed, we have managed to offset continued unavoidable headwinds in the double-digit billions. At the same time, the environment for the automotive industry remains extremely challenging: geopolitical crises, trade conflicts, high regulatory requirements, volatile markets and intensified competition. In an unprecedented risk scenario, Volkswagen Group enters the next phase of its transformation – from a position of strength and with a clear understanding of the opportunities ahead. With the most comprehensive and far-reaching program in the company’s history – for products, technologies, competitiveness, structures and growth areas. With our future plan, we will become even more innovative, faster, more attractive and robust - and sustainably ensure the Volkswagen Group’s success.”

“We are launching attractive new vehicles, consistently implementing our software roadmap, reducing investments and overhead costs. At the same time, we generated a Net Cash Flow of 3.2 billion euro in the first half of the year. Despite such progress, our operating margin of 3.8 percent remains too low and underlines the call to action. In an environment where the Chinese total market is down by 20 percent and Chinese competitors are increasing exports and thereby competitive pressure in Europe, the currently planned initiatives are not sufficient. We must accelerate efforts to structurally lower our cost base and sustainably improve our earnings quality. This includes improved vehicle cost structures, lower overhead costs, higher efficiency in our plants, faster technology development, and quicker decision-making processes. Therefore we need to significantly reduce complexity - in our product portfolio and platforms, in our equity portfolio, as well as in our leadership and decision-making structures. What matters now is swift and consistent implementation.”