The group Volkswagen cuts its 2024 car sales forecast to nine million and expects group revenue to be around 320,000 million euros0.06% lower than a year ago, but significantly lower than the five percentage point rebound it had hoped to see at the end of the year.
The German manufacturer waited until the end of the stock market session this Friday to publish its new forecasts, in which it estimates that operating profit will be around 18 billion eurosi.e. a sales rate of 5.6%, far from the range forecast for the year between 6.5% and 7%.
The adjustment to Volkswagen’s sales forecast is mainly due to a negative development in sales of Volkswagen brands, Volkswagen commercial and technological vehicles that, given a “difficult market environment, they did not meet expectations”, as the group argued.
Furthermore, the macroeconomic deterioration faced by Germany – one of the group’s main markets – after having confirmed in the second quarter a contraction of 0.1% of GDPhas a negative effect on the company’s accounts, which admits that in the future there could be “more risks”, particularly for its core business, the manufacture and sale of vehicles.
Volkswagen Sales
In this context, Volkswagen expects the net cash flow of its automotive division to reach 2 billion euros, far from the range between 2,500 and 4,500 million euros planned so far.
The new estimates include the assumption of mergers and acquisitions expenses valued at 3,500 million euros, of which approximately 2,000 million euros are attributable to expenses linked to the “joint venture” that the group plans to launch with the ‘American Rivian.
At the same time, Volkswagen warns that the net liquidity of the automotive segment will be between 36 billion and 37 billion eurosor two million less than the forecasts in force until now. In the financial services subsidiary, the business environment and the intensification of competition with the arrival of many Chinese automobile brands led to a further adjustment of forecasts.
Volkswagen no longer expects to be able to offset the negative effect of around 200 million euros from the deconsolidation of Volkswagen Bank Rus during the financial year. By 2024, the financial services division is expected to achieve an operating profit of around €3.2 billion, 20% less than expected.
Thus, the Volkswagen group emphasizes that this forecast “takes into account the effects of the valuations of the hedging instruments accumulated during the year and the unforeseen expenses of approximately 2.6 billion euros for the whole of 2024.
Porsche also has an impact
This situation also affects its luxury sports brand, Porsche, which has become the latest German manufacturer to lower its profit forecast for the 2024 financial year and expects to close the year in a range between 2,400 and 4,000 million euros.
In the press release, the Volkswagen group brand explains that the range of its previous after-tax profit expectations placed its profits between 3,500 and 5,500 million euros. The manufacturer specifies, however, that the adjustment of profit forecasts has no impact on its liquidity. It thus confirms its current forecast of a net debt of between 5,000 and 5,500 million euros.
The two manufacturers thus join the German companies Mercedes-Benz and BMWwho cut their forecasts for this year earlier this month, in what appears to be a complicated year for the German auto industry.
Volkswagen shares rose 2.21% during Friday’s session on the Frankfurt Stock Exchange, to trade above 97.12 euros per share, while the so-called American Depository Receipt (ADR) that the automaker has on the American Nasdaq remained stable with an increase of 1.15% until the new forecasts were known, when they turned around to trade with declines and signed a market value of around 10.5 dollars per share (around 9.41 euros per share). .
