VW Group is still talking the talk of the playground bully. When the top brass came on the conference call (27 April) to disclose the numbers for the first quarter of the financial year the first line of chat was VW’s size and muscle. “We have moved strongly on our strategy to be the most successful auto company.”
They mean the most successful in the world. The double-act of sales and marketing director, and chief financial officer, had all the facts between them. Worldwide, VW’s volume was up 14% at 4m units. That’s impressive growth in a world where new car growth is just 8%. And 14% is better than their 11.4% growth of last year.
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Audi was the sprinter: 18% up worldwide. The VW brand was 10% up. Skoda won all the bragging rights with a saunter to 21% though, while SEAT managed 2.8%. SEAT is still the delinquent child in the family. It persists in losing money and you can just feel the sense of despair when the grown-ups talk about it. Bentley held the line; same sales as last year.
The group cash earnings were poor. A mere EUR700m was banked in the quarter. Then chief financial officer Hans Dieter Potsch reminds us that they bought Porsche for cash…a mere EUR4bn.
VW is tailoring its products for the varying needs of the markets: The new Passat on sale in the US next month is “made in America for America.” How many times have brands with global ambition failed to deal with that minor inconvenience? America is a bit of an issue. One questioner at the results meeting asked if it was still losing money. The answer was evasive.
Other new models were mentioned: there is to be a hybrid Audi Q5 and a Bluemotion van. Then comes the completely mad, gull-wing Lamborghini Aventador LP 700-4 just to remind us that German company has a sense of humour.
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By GlobalDataNew models are going to come in a rush from 2013, says sales chief, Christian Klingler. Capex will grow by 6% a year from now on to push that new model strategy. VW says that some of its competitors have problems with supply, yet: “we have had very strong order intake this year and have had no problem with supply.” Part of the new model policy has been to get the prices up – something that they (and others) find very hard to do without regular product refreshment.
A stat in the small print of the financials shows that distribution cost per car has fallen from 9.5% to 8.3%. Again, it’s all about better cars at higher prices out-pacing the cost of moving cars to market.
Most of the time, the two directors were pretty revealing on the plans to grow up to be the biggest force on the planet. But on the issue of buying a stake in Isuzu there was a straight bat: “We are looking at opportunities to co-operate on components.”
As VW showed with Porsche, one short-cut to world domination is to grow by acquisition. But clearly there is no great rush to do that. Better a good shape to the business than an early start to world domination.
