Yahoo Finance Volkswagen's Skoda Auto Sees Soaring Profits in Q1 as Electric Vehicle Investments
Volkswagen (ETR:VOWG_p)'s Skoda Auto has reported a staggering 60.8% year-on-year increase in operating profit for Q1 2021, reaching €542m ($598m). The impressive growth is attributed to a rise of a third in revenue, hitting €6.8bn. The automaker noted that global deliveries experienced a 12.6% uptick during the period, with higher sales observed in southern and western Europe.
This strong performance comes as parent company Volkswagen confirms its 2023 outlook following better-than-expected Q1 results. The German automaker's sales rose by 22% year-on-year to €76.20bn ($84.31bn), driven by vehicle sales in Europe and North America. Despite a decline in the operating result before special items, which fell from €6.4bn in Q1 2021 to €5.75bn, Volkswagen remains committed to its ambitious electric vehicle (EV) plans.
Aiming to launch 70 new electric models by 2030, Volkswagen is heavily investing in EVs. In Q1, the company reported an operating profit of €5.7bn ($6.3bn), even with a 15% slump in deliveries in China. Strong demand from Europe and the US helped offset this drop, and the automaker confirmed its outlook based on a high order book of 1.8 million vehicles.
Volkswagen intends to regain lost ground in China by expanding its model range and introducing technology tailored to local preferences. Additionally, the company is making strides to capture more market share in the US, where it has plans for a new South Carolina plant that will produce electric trucks and SUVs under the Scout nameplate.
Skoda Auto, meanwhile, is working to bounce back from parts shortages that have plagued deliveries and waiting times for the past three years. The automaker reported a 40.7% increase in the deliveries of its all-electric Enyaq during Q1, demonstrating the brand's commitment to sustainable mobility solutions.
The strong Q1 performance of both Volkswagen and Skoda Auto reflects the automakers' determination to lead the industry in electric vehicle innovations and cater to the evolving preferences of global consumers. With continued investments and strategic moves, Volkswagen Group is poised to maintain its competitive advantage in the rapidly changing automotive landscape.
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