VW launches product push; forecasts slow car sales growth

BERLIN -- Volkswagen Group is launching a big product push this year that it expects to help offset a gloomy economic outlook and growing competition.

Presenting the automaker's 2023 results, finance chief Arno Antlitz said the "general economic situation remains challenging," but added "we are confident about 2024, despite the muted economic outlook and intense competition."

VW Group expects a 3 percent rise in its car sales this year, down sharply from 2023. It said it has "started the new year with a clearly positive trend" compared with the start of last year.

The company plans to launch a record 30 new or upgraded models during 2024.

"To ensure that we remain successful sustainably, we will focus in 2024 on ramping up new vehicles and reducing costs," finance chief Arno Antlitz said in a statement on Wednesday.

While VW is ready to give up market share in China this year and next, North America has the potential to become its biggest growth market in 2024, Antlitz said.

VW joins rivals in warning of a challenging year. When Stellantis reported results last month, it predicted a "turbulent" 2024.

VW this month released a muted outlook for 2024. It said it expects sales revenue to grow by as much as 5 percent this year, slowing from 15 percent last year.

VW Group's deliveries to customers rose 12 percent to 9.24 million vehicles in 2023. Deliveries of battery-electric vehicles by all group brands rose 35 percent to 771,100.

EVs 'the future'

VW Group's 2024 product push includes the market launches of the VW ID7 and ID7 Tourer all-electric midsize models, the all-electric Porsche Macan and Audi Q6 E-tron, the VW Buzz long-wheelbase all-electric van and upgrades for the combustion engined VW Golf, Tiguan, Passat, Skoda Octavia and Skoda Superb including new hybrid technology.

The new EV launches come as demand growth for electric cars has been slowing. German rival Mercedes-Benz said last month it was delaying its electrification goal by five years and would keep revamping combustion-engine models.

When asked about demand for EVs, VW Group CEO Oliver Blume said they were "the future, period," but added: "we are flexible enough to adapt to changes in different markets."

The company is currently in cost-cutting mode and has unveiled plans to slash administrative staff costs at its namesake brand by a fifth.

VW said it expects rising vehicle orders to help offset losses at its Cariad software unit, which reported an operating loss of €2.4 billion for 2023. Operating profit at VW's financial services arm declined by around a third last year due to falling prices for used cars.

Porsche highly profitable

The company said the operating return on sales of the Brand Core Group comprising VW passenger cars, VW Commercial Vehicles, Skoda, and Seat/Cupra rose to 5.3 percent from 3.6 percent in 2023, in an important first step towards its target of 8 percent.

Margin at the Progressive Brand Group (Audi, Lamborghini, Bentley, Ducati) fell to 9 percent from 12.3 percent and the margin at the Brand Group Sport Luxury (Porsche) remained at the previous year's level of 18.6 percent.

VW is under pressure to improve performance in China, where homegrown champion BYD overtook it as the best-selling automaker last year.

The automaker is trying to catch up by overhauling its electric offerings that have failed to impress local customers and is partnering with Chinese EV maker Xpeng. It's pursuing cheaper batteries and improved automated-driving features and aims to regain market share in China from 2026, Antlitz said.

Reuters and Bloomberg contributed to this report