sueddeutsche.de
VW Profit Falls Despite Sales Rise Due to Premium Brand Weakness and US Tariffs
Volkswagen's first-half vehicle deliveries rose 0.5% to 4.4 million, boosted by a 46% increase in electric vehicle sales; however, lower profitability in premium brands (Audi, Porsche) and US tariffs (€1.3 billion) resulted in a significant profit decline, leading to lowered profit margin forecasts for 2025.
- What were the primary factors contributing to Volkswagen's reduced profitability in the first half of 2024?
- Volkswagen's overall vehicle deliveries increased by 0.5 percent to 4.4 million cars in the first half of the year. Electric vehicle sales surged by approximately 46 percent, but lower profit margins on these models offset gains, leading to a significant decline in overall profit. The decline in profit is primarily attributable to underperformance by Audi and Porsche.
- What are the potential long-term implications of US tariffs on Volkswagen's financial outlook and strategic decisions?
- Volkswagen's future profitability is uncertain, largely due to US tariffs costing €1.3 billion in the first half of the year and the continued underperformance of premium brands. The company revised its 2025 operating profit margin forecast downward to 4-5 percent, from a previous expectation of 5.5-6.5 percent. Volkswagen is negotiating with the US government for tariff relief in exchange for significant US investments.
- How did the performance of different Volkswagen brand groups (premium vs. core) compare, and what factors explain the differences?
- Reduced profitability in the premium brands, Audi and Porsche, significantly impacted Volkswagen's overall financial results. Audi's profit margin dropped to 3.3 percent, while Porsche's plummeted to 5.2 percent, representing a 71 percent decrease in profit. In contrast, the 'Core' brand group, including VW, Å koda, and Seat/Cupra, performed better.
Cognitive Concepts
Framing Bias
The narrative emphasizes the negative aspects of VW's financial performance, particularly the significant drop in Porsche's profits and the lower-than-expected margins at Audi. While presenting factual data, the framing prioritizes negative news, creating a more pessimistic overall impression. The headline (if there was one) likely focused on the profit decline, reinforcing this negative framing. The repeated mention of profit drops and percentage decreases throughout the piece further strengthens the negative narrative. This emphasis on negative aspects could disproportionately influence reader perception.
Language Bias
The language used is largely neutral, presenting facts and figures without overtly charged terminology. However, words like "absturz" (crash), "Einbruch" (collapse), and "sackte" (plunged) when describing Porsche's profit decline, carry negative connotations that could influence reader perception. More neutral phrasing, such as "decrease" or "decline" would provide a less dramatic representation of the events.
Bias by Omission
The article focuses heavily on the financial performance of VW's different brands, particularly the underperformance of Audi and Porsche, and the success of Skoda. However, it omits discussion of the broader automotive market trends that might be influencing VW's results. For example, are other automakers experiencing similar profit declines or successes? Also absent is any detailed analysis of VW's internal strategies, beyond mentioning investment plans in the US. While acknowledging uncertainty, the article doesn't explore alternative explanations for VW's financial situation beyond US tariffs and internal brand performance. The omission of these perspectives limits the reader's ability to fully assess VW's situation.
False Dichotomy
The article presents a somewhat false dichotomy by contrasting the success of Å koda with the struggles of Audi and Porsche. While highlighting Å koda's success as a positive counterpoint, this framing simplifies the complex factors influencing the performance of each brand and fails to explore common factors or broader trends influencing all brands. The contrast, while factually accurate, could mislead readers into thinking these are isolated cases rather than reflections of wider market conditions or internal VW strategies.
Sustainable Development Goals
The article highlights a significant profit decline for Volkswagen, impacting economic growth and potentially employment. Reduced profit margins at Audi and Porsche, core contributors to the company's overall financial health, directly affect economic performance and potentially job security. The decline in Porsche's profit by 71% exemplifies this negative impact on economic growth and potentially employment within the company.