Volkswagen Group has adjusted its 2024 sales forecast to nine million vehicles, down from previous expectations.
Dissapointing Sales
The company now anticipates group revenues around 320 billion euros ($340 billion), a slight decrease of 0.06% from the previous year. This adjustment reflects disappointing sales across key brands like Volkswagen Commercial Vehicles and Tech, primarily due to a challenging market environment.
Operating profits are also expected to drop, with estimates falling to 18 billion euros ($19 billion), or 5.6% of sales. This figure is below the initially predicted range of 6.5% to 7%, according to El Economista.
Germany’s macroeconomic struggles, marked by a 0.1% GDP contraction in Q2 2023, have hit one of Volkswagen’s core markets hard. The company expects these challenges to persist, with potential future risks to its core vehicle production business.
Reduced Free Clash Flow Projection
Volkswagen has also reduced its free cash flow projection for the automotive division to 2 billion euros ($2.1 billion), falling short of earlier forecasts. Additionally, joint venture-related expenses, such as its planned partnership with Rivian, are estimated at 2 billion euros ($2.1 billion).
Volkswagen's financial services division is expected to see a 20% decline in operating profit, reaching around 3.2 billion euros ($3.4 billion). Meanwhile, net liquidity in the automotive segment is projected between 36 and 37 billion euros ($38.2 billion to $39.3 billion), two billion euros lower than prior estimates.
Porsche, part of the Volkswagen Group, also revised its 2024 profit forecasts downward, following other German automakers like Mercedes-Benz and BMW, which have also adjusted their outlooks.
