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The Numbers
Volkswagen mentioned its after-tax earnings fell by 20 p.c within the first half of the yr, to eight.5 billion euros, or $9.45 billion, in contrast with the identical interval final yr. However general income elevated 18.2 p.c as the corporate stemmed a few of its losses in China, the place deliveries had been down 1.2 p.c.
Western Europe offered the corporate with its strongest enterprise, with 1.65 million autos ordered within the first half of the yr, and 200,000 of them — or 12 p.c — had been electrical autos, the corporate mentioned. It expects wait instances to scale back by the second half of the yr, when constraints on provides and transport in addition to logistics tangles will ease.
The corporate additionally confirmed that it had bought its Russia operations, together with a producing plant, for €125 million. The sale of Volkswagen Group Rus to Avilon, a Moscow-based dealership, was introduced in Might.
The China Technique
As a part of an effort to claw again floor misplaced within the Chinese language market, Volkswagen mentioned on Wednesday it will make investments $700 million for an almost 5 p.c stake in XPeng, a Chinese language start-up that makes electrical autos.
Final yr, the Chinese language automaker BYD overtook Volkswagen because the main model within the nation. BYD widened the hole within the second quarter of the yr, promoting greater than 595,000 hybrid or totally electrical fashions, in contrast with 544,000 autos bought by Volkswagen, solely 23,400 of them electrical.
Volkswagen hopes that its funding in XPeng will assist advance the German automaker’s electrical automobile software program to the requirements produced by Chinese language producers. Analysts say that German corporations have but to match the technological developments in telephones, houses and autos in addition to in-car leisure that drivers in China count on.
The corporate additionally mentioned that its Audi division would broaden its present relationship with SAIC, a Chinese language automaker that sells automobiles below the British model MG.
Some analysts interpreted the transfer as a concession that Volkswagen was unable to compete with Chinese language corporations on the most recent expertise.
“The auto of the long run is coming from China. The Chinese language are the leaders in essential expertise sectors,” mentioned Ferdinand Dudenhöffer, the director of the Middle for Automotive Analysis in Duisburg, Germany. “With out the know-how of the Chinese language, Volkswagen would lose prospects in China, and in a number of years, in the remainder of the world.”
What’s Subsequent
In contrast to Tesla, which has turn out to be the world’s hottest electric-car firm partly by producing comparatively few fashions in a restricted palette of exterior and inside colours, Volkswagen Group gives dozens of fashions from its 10 manufacturers, which embody Audi, Porsche, Lamborghini and others. Analysts have more and more questioned whether or not such a fancy providing can stay aggressive in at present’s market. However Oliver Blume, Volkswagen’s chief government, expressed confidence that VW prospects, together with these in China, need extra selection of their autos.
“Folks love manufacturers, individuals love design and individuality,” Mr. Blume mentioned on Thursday. “We predict that’s our specialty.”
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