- Volkswagen has been warning things were looking bad and their third quarter results confirm that.
- Sales fell 8.3% in Q3, further exacerbating a troubling 20.5% decline in year-to-date profits.
- The automaker attributed the poor results to issues like a challenging economy, high costs, and EV resistance.
The Volkswagen Group has revealed their third quarter earnings and there’s no sugar coating things as it was a brutal three months. Compared to this time last year, sales dropped 8.3% while profits plunged 41.7%.
The company only made €2.86 ($3.11) billion in Q3, which was down from €4.89 ($5.31) billion last year. Given that drastic drop, it’s not surprising the automaker has been eyeing plant closures, cost cuts, and massive layoffs.
More: VW May Close Three German Plants, Lay Off Thousands
Through the first nine months of the year, Group sales were down 4.4% to 6,762,000 units. This, in turn, helped to push their operating result 20.5% lower to €12.91 ($14.03) billion. The latter figure comes even as sales revenue was up slightly.
Volkswagen blamed the lackluster performance on a variety of issues including higher fixed costs and restructuring expenses. The company also cited supply chain shortages, a challenging macroeconomic environment, and a “comprehensive renewal” of their luxury sport product portfolio.
CFO Arno Antlitz noted the Volkswagen Brand had an “operating margin of only two percent after nine months. This highlights the urgent need for significant cost reductions and efficiency gains.”
The Group’s EV push has also stalled as the automaker confirmed “industry-wide buyer reluctance” to electric vehicles. This is a huge problem for a company that has embraced EVs and Volkswagen said the sentiment helped push electric vehicle deliveries 4.7% lower than a year ago.
While it’s been a rough few months, there are signs of hope. Audi’s lineup has been extensively revamped with new models including the A5 and Q5 as well as the A6 and Q6 e-trons. Lamborghini has also introduced the Temerario, while Volkswagen has an assortment of new and updated products.
Despite these positive developments, things won’t get better overnight and deep cuts are coming. Previous reports have suggested three German plants could be on the chopping block as well as a facility in Brussels.