Volkswagen Group missed its cash-flow target for 2022 after supply-chain and logistics disruptions in recent months left the company with unsold vehicles.
The automaker reported preliminary cash flow of around 5 billion euros ($5.36 billion) for 2022, falling well below its target of around 8.6 billion euros, according to a preliminary earnings statement late Tuesday.
VW's problems are similar to those of other carmakers that have seen unsold finished goods and raw materials piling up.
Stellantis said in November that freight problems across the automotive industry such as railcar, truck and driver shortages, and ship availability were making it hard to get cars to dealers.
"VW is not alone in facing logistics challenges related to getting finished inventories to dealers at year end," RBC analyst Tom Narayan wrote in a note. "Our channel checks suggest this was a common issue” among European carmakers.
Still, the missed cash target is a blow to VW Group CEO Oliver Blume, who took over from ousted CEO Herbert Diess in September with goals including improvements to planning after VW was worse hit than many peers by the severe semiconductor shortages.
VW expects the logistics problems to ease this year.
Price pressures
VW Group's deliveries were up 12 percent in the second half of 2022, it reported in January, but full-year deliveries were the lowest in over a decade as COVID-19 lockdowns in China and the war in Ukraine upended supply chains.
Chief Financial Officer Arno Antlitz said in October that the automaker had 150,000 unfinished vehicles in its inventory and the company was stocking up on supplies to protect against further shortages, pushing up prices and cutting costs to make up for lower unit sales.
VW’s full order books in Europe will support sales through the first half of the year, Antlitz said, but as more cars go on sale, it will also be more difficult to pass on increased costs from higher input prices.
Automakers are struggling to increase output as they transition to electric vehicles and contend with weakening demand and inflation.
Concerns are growing that consumer appetite for new cars is dwindling, leading to price reductions from Tesla and Ford Motor and a forecast from Robert Bosch that automotive production will not reach pre-pandemic levels this year.
VW Group will publish its full-year earnings and annual report on March 14.
Preliminary earnings of 22.5 billion euros in 2022. which VW released on Tuesday, put the company at the higher end of the 7 percent to 8.5 percent margin it had forecast, with sales of around 279 billion euros compared with 250 billion in 2021.
Reuters contributed to this report
