Volkswagen AG (ETR: VOW3) reported an increase in revenue, operating profit and deliveries in FY17 despite still dealing with setbacks caused after “Dieselgate” in 2015. Compared to 2016, the group’s sales revenue grew 6.2 percent to €230.7 billion (US$285.94 billion) and its operating profit increased 16.5 percent to €17 billion (US$21.07 billion).
Volkswagen Group experienced growth in its core regions: Europe, China and North America. The company delivered 4.3 percent more units than in 2016, reaching a total of 10.7 million units including all its brands. China was the region that experienced the greatest increase in sales (5.1 percent compared to FY16) with 4.2 million vehicles. In Europe, the group grew its deliveries by 3.3 percent to 4.3 million units and in North America 4 percent with a total of 980,000 vehicles.
Most of the group’s revenue in FY17 came from Germany (37 percent) and the rest of Europe (44.8 percent), Asia-Pacific (9.6 percent) and North America (5 percent). The company continues to deal with the issues caused by the diesel crisis that started in September 2015. The company reports a 68 percent advancement in the processing rate for recalls and service campaigns worldwide. Yet, Volkswagen Group’s net income for FY17 increased to €4.35 billion (US$5.39 billion), a 55.5 percent growth compared to the €2.79 billion (US$3.45 billion) reported in FY16.
Volkswagen Passenger Cars, Audi and Škoda were the three divisions that drove the Volkswagen Group’s sales worldwide. In terms of revenue, Volskswagen Passenger Cars, Audi and Porsche Automotive were the brands that contributed the most to the group’s total revenue.
“The results of the year 2017 demonstrate, we are actively shaping the transformation of our company. And we will not cease in our efforts in 2018,” said Frank Witter, CFO of Volkswagen AG, during the Annual Press Conference where the group’s 2017 Annual Results were presented.
The group’s priorities for 2018 include continuing to resolve the diesel crisis, focusing on successfully operating business, increasing efficiency and synergies, going ahead with Strategy 2025 and promoting a new corporate culture. The group expects to increase deliveries, grow sales revenue by up to five percent and reach an operating return on sales of up to 7.5 percent. At the same time, the company has a significant investment program that focuses on trends such as electrification, vehicle automation, efficient combustion engines and mobility services to move into the future of the industry.
By 2022, Volkswagen Group plans to have invested €34 billion (US$41.14 billion) in e-mobility, digitalization, self-driving systems and mobility services. Around €6.6 billion (US$8.18 billion) of this investment plan will be implemented in 2018. The group’s “Roadmap E” initiative outlines that by 2025, up to 25 percent of the group’s vehicles will be electric and that by 2030 there will be an electric version of each of its models.