Volkswagen AG Sales and Profitability Forecasts Reduced

Volkswagen AG VZO O.N. (ETR:VOWG_p) has decreased its sales and profitability forecasts for the year due to softer vehicle demand and sluggish global economic growth.

Sales Expectations

The company anticipates sales of approximately €320 billion, down from €322.3 billion last year. Deliveries are projected to be around 9 million vehicles, down from 9.24 million vehicles in the previous year. Previously, Volkswagen had forecasted sales growth of up to 5% and an increase of 3% in deliveries.

Factors Impacting Performance

Volkswagen attributes the weaker sales outlook to soft demand for its core Volkswagen Passenger Cars, Volkswagen Commercial Vehicles, and Tech Components. These segments have fallen short of original expectations, and the deterioration in the macroeconomic environment has further impacted demand.

Profitability Outlook

The operating return on sales, a key profitability measure, is now expected to be about 5.6% this year, down from a prior guidance range of 6.5% to 7%.

Revised Cash Flow Forecast

The company has also adjusted its net cash flow forecast for its automotive division to around €2 billion, compared to an earlier projection of €2.5 billion to €4.5 billion.

Upcoming Reports

Volkswagen is scheduled to report its interim results for the period ending September 30, 2024, on October 30.