The Numbers
Volkswagen stated its after-tax earnings within the first half of the yr fell 20 p.c from a yr earlier, to eight.5 billion euros, or $9.45 billion. But general income elevated 18.2 p.c as the corporate stemmed a few of its losses in China, the place deliveries have been down 1.2 p.c.
Western Europe offered the corporate with its strongest business, with 1.65 million autos ordered within the first half of the yr, and 200,000 of them — or 12 p.c — have been electrical, the corporate stated. It expects shorter waits by the second half of the yr, when constraints on provides and transport in addition to logistics tangles will ease.
The firm additionally confirmed that it had offered 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 May.
The China Strategy
As a part of an effort to claw again floor misplaced within the Chinese market, Volkswagen stated on Wednesday that it will make investments $700 million for a virtually 5 p.c stake in XPeng, a Chinese start-up that makes electrical autos.
Last yr, the Chinese 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 offered by Volkswagen, solely 23,400 of them electrical.
Volkswagen hopes that its funding in XPeng will assist advance the German automaker’s electrical car software program to the requirements produced by Chinese producers. Analysts say German firms have but to match the technological developments in telephones, properties and autos in addition to in-car leisure that drivers in China anticipate.
The firm additionally stated its Audi division would develop its relationship with SAIC, a Chinese automaker that sells automobiles underneath the British model MG.
Some analysts interpreted the transfer as a concession that Volkswagen was unable to compete with Chinese firms on the most recent know-how.
“The automobile of the future is coming from China. The Chinese are the leaders in important technology sectors,” stated Ferdinand Dudenhöffer, the director of the Center for Automotive Research in Duisburg, Germany. “Without the know-how of the Chinese, Volkswagen would lose customers in China and, in a few years, in the rest of the world.”
What’s Next
Unlike Tesla, which has turn into 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 embrace Audi, Porsche and Lamborghini. Analysts have more and more questioned whether or not such a fancy providing can stay aggressive in at this time’s market.
But Oliver Blume, Volkswagen’s chief govt, expressed confidence that VW prospects, together with these in China, wished extra selection of their autos.
“People love brands — people love design and individuality,” Mr. Blume stated on Thursday. “We think that is our specialty.”
Source: www.nytimes.com