BERLIN – German auto giant Volkswagen yesterday said it expects to report improved sales and profits for the first half of the year in preliminary results ahead of an earnings report later this month.
The company has also decided to extend the contract of chief executive Herbert Diess until October 2025, it said later.
“Deliveries to customers of the Volkswagen Group continued to recover strongly in the first half of the current year, leading to a very strong group turnover, as well as a very high operating profit,” said the initial statement.
Operating profit is expected to reach around €11 billion (RM54.75 billion) for the January-June period, said the carmaker ahead of its scheduled earnings report on July 29.
A global shortage of semiconductors that hurt production has “shifted and will rather impact us” in the second half of 2021, it said.
Volkswagen had reported first-quarter net profits of €3.4 billion, up from €517 million in the period from January to March last year, when the first wave of the Covid-19 pandemic closed showrooms and factories.
The supervisory board has renewed its support for Diess, who was named chairman in 2018 with a mandate to shake up traditional ways of operating in the wake of the “Dieselgate” emissions cheating scandal.
He tangled with the company’s powerful unions several months ago, and they accused him of serious management errors around the launch of crucial models.
He has turned the German automaker unwaveringly towards electric vehicles, a growing trend in the sector, and a compromise with the unions was reached at the end of last year.
This year’s results now appear to be headed in the right direction, with sales for the 12-brand group, including Audi, Porsche and Skoda, gaining 13% in the first half to €62.4 billion.
Like other carmakers, Volkswagen has been grappling with a supply crunch in semiconductors as the virus crisis boosts demand for the crucial microchips that are also needed for consumer electronics.
The shortage has forced Volkswagen to trim production at some plants and put thousands of workers on shorter hours, delaying car deliveries.
The firm in February said it nevertheless expects group revenue for 2021 to be “significantly higher” than last year, while deliveries will also be “significantly up” on 2020. – AFP, July 10, 2021
