Volkswagen reported brand group volume doubled its operating profit in the first quarter, sales revenue climbing 36% to reach EUR 33.16 billion ($36.6 billion).

The brand group overall saw strong growth in battery electric vehicle deliveries, which rose 49%. Overall, the company’s deliveries were up 30% to 1.19.

Consolidated operating profit before special items doubled to EUR 1.74 billion ($1.92 billion), the brand group’s operating return on sales reaching 5.3%, up 1.7 percentage points.

The strong results were driven by higher sales volume, consistent cost management, and a focus on efficiency in key synergy areas.

“Strong brands, lean engine room, [and] targeted cooperation between the brands enabled us to expand existing synergies and scaling benefits in the past few months and, at the same time, increase our financial robustness and innovation strength. The Brand Group Volume’s key figures prove we are on the right track,” said Thomas Schaefer, member of the Volkswagen Group Board of Management in charge of Brand Group Volume.

Successful development of Volkswagen, Skoda, SEAT/CUPRA and Volkswagen Commercial Vehicles brands also fueled the performance.

Volkswagen

The Volkswagen brand reported an upward trend in deliveries, handing over 1.02 million passenger cars to customers worldwide in the first quarter, up 0.9%. Full-electric vehicle sales accounted for a large share of the success, representing about 70,000 vehicles, 31.2% of all BEVs delivered by the Volkswagen Group.

Despite the challenging environment and persistent supply constraints, operating profit before special items came in at EUR 608 million ($670 million), an improvement on the EUR 513 million ($565 million) a year earlier.

Sales revenue rose from EUR 14.9 billion ($16.42 billion) in the first quarter of 2022 to EUR 20.5 billion ($22.59 billion).

The positive trend was partially countered by increases in material costs and exchange-rate fluctuations. As a result, the brand's operating return on sales before special items in the first three months of the current fiscal year stood at 3%, 0.5 percentage points lower than the corresponding quarter in 2022.

Škoda Auto 

Škoda Auto also reported a strong first quarter, delivering 209,600 vehicles to customers worldwide, an increase of 12.6%. Deliveries of the all-electric Enyaq iV family rose over 40%.

Skoda generated sales revenue of EUR 6.8 billion ($7.49 billion), up 33.3% year over year. Operating profit before special items also increased by over 60% to EUR 542 million ($598 million). The return on sales sat at 8%.

SEAT/CUPRA 

SEAT/CUPRA more than quadrupled the EVs delivered between January and March, increasing deliveries by 318.9% to 9,200 units. In total, SEAT/CUPRA delivered 125,218 vehicles in the quarter, an increase of 23.37% year-over-year and the best first quarter in the company's history.

The company reported an operating profit of EUR 144 million ($159 million), an improvement of EUR 139 million ($153 million) year-over-year. The operating return on sales rose 4%. High demand and improved component supply increased sales revenue EUR 3.6 billion ($3.96 billion), a 48.2% increase year-over-year.  

Volkswagen Commercial Vehicles

Volkswagen Commercial Vehicles continued the positive business trend of 2022 in the first quarter of fiscal year 2023. Its deliveries grew by 18.7% to 97,189 vehicles. The first quarter represented the first full quarter of ID.Buzz since its market launch, lifting deliveries of all VWN BEV vehicles to 5,500 units, compared to 700 BEVs in the same quarter in 2022.

Sales revenue rose to just under EUR 3.6 billion ($3.96 billion), driven by positive pricing and mix effects. Even though the market and supplier situation remained tense, operating profit before special items soared to EUR 171 million ($189 million), compared to EUR 46 million ($50.7 million) a year earlier. The operating return on sales increased from 2% in the first quarter of 2022 to 4.8%.

Brand Group volume is a key factor to ensure financial stability, synergies and innovation within the Volkswagen Group. It also strengthens the automaker’s overall resistance to external pressures, Volkswagen reported.

For the 2023 fiscal year, the Brand Group forecasts a consolidated operating return on sales significantly higher than the 3.6% posted for 2022