Financially, things are looking up for Volkswagen Group overall, yet deliveries are still falling in the Americas. Worldwide, the automotive giant's profits after taxes rose 26.8 percent in the first quarter of 2014 to 2.47 billion euros ($3.4 billion). Total sales revenue was up 2.7 percent to 47.8 billion euro ($66 billion).

Worldwide, across all of VW Group's brands, excluding its Chinese joint ventures, sales were up 7.9 percent to 2.56 million units and production was up 7.4 percent to 2.565 million vehicles. Deliveries were up 7.4 percent in Europe and 13.7 percent in the Asia-Pacific region. China is an absolutely massive market for the company now, with 879,898 cars delivered in the first three months of the year alone, up 14.5 percent.

While VW Group is doing quite well in some regions around the world, things in North and South America are not so rosy. North American deliveries fell 4.4 percent to 194,606 units and market share fell to 4.5 percent, compared to 4.8 percent in Q1 of last year. US deliveries were down 6.5 percent to 133,481 vehicles compared to last year, and Canada fell even further, down 8.4 percent to 16,694 vehicles. However, Mexico was up 4.2 percent, with a total of 44,431 sold. South America also fell 22.4 percent to 141,589.

Overall, the VW Group's biggest profit drivers weren't vehicles from its namesake division. Rather, luxury marques Audi and Porsche carried the day for the conglomerate, with the Four-Ring brand contributing 1.3 billion euros ($1.8B) to the coffers and the House of Stuttgart chipped in a further 698 million euro ($964M).

Volkswagen predicts an increase in deliveries by the end of the year and a three-percent increase in sales revenue, which it appears to be on track for. Scroll down to read the official financial report.
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Apr 29, 2014

First-quarter sales revenue up 2.7 percent year-on-year to EUR 47.8 billion (EUR 46.6 billion)

Operating profit rises by 0.5 billion to EUR 2.9 billion despite ongoing challenging environment

Net liquidity in Automotive Division remains high at EUR 17.7 billion

The Volkswagen Group has made a good start to fiscal year 2014 in a market environment that remains difficult. Sales revenue rose by 2.7 percent in the first three months of the year to EUR 47.8 billion (EUR 46.6 billion) despite negative currency effects. Operating profit grew by 21.8 percent to EUR 2.9 billion (EUR 2.3 billion). The Group's operating profit and sales revenue exclude the activities of the Chinese joint ventures, which are accounted for in the financial result using the equity method and is therefore not included in consolidated operating profit. The share of operating profit attributable to the Chinese joint ventures in the first quarter of 2014 was EUR 1.24 billion (EUR 1.16 billion).

The Volkswagen Group's profit before tax amounted to EUR 3.4 billion (EUR 2.7 billion). The return on sales before tax rose from 5.8 percent to 7.0 percent. Profit after tax was EUR 2.5 billion (EUR 1.9 billion). "The Volkswagen Group has established a strong position in recent years. Our good start to the current fiscal year is an additional proof of this. We must now continue improving our position and maintain our successful course as part of the systematic implementation of our Strategy 2018", said Prof. Dr. Martin Winterkorn, Chairman of the Board of Management of Volkswagen Aktiengesellschaft, in Wolfsburg on Tuesday.

Global demand for passenger cars continued to rise in the first quarter of 2014. However, market trends were mixed at a regional level. The number of new registrations in the Asia-Pacific region, Western Europe, North America and Central Europe increased year-on-year, while the emerging markets in South America and Eastern Europe recorded lower market volumes. The weak currencies of key emerging economies pushed prices up and thus put pressure on demand. "These challenges mean that it is more important than ever that we focus on three key action areas: firstly, disciplined cost and investment management, secondly, our profitability targets and thirdly, improved profitability in all regions", said CFO Hans Dieter Pötsch.

Net liquidity in the Automotive Division remains high

Net liquidity in the Automotive Division amounted to EUR 17.7 billion at the end of March (December 31, 2013: EUR 16.9 billion). Liquidity was reduced by the capital increase in the Financial Services Division, while the successful placement of hybrid notes strengthened the Automotive Division's capital base. Investments in property, plant and equipment (capex) in the Automotive Division remained virtually unchanged at EUR 1.6 billion (EUR 1.7 billion). The Volkswagen Group maintained its disciplined approach to investment with a ratio of capex to sales revenue in the Automotive Division of 3.9 percent (4.1 percent). Investments were made primarily in production facilities and in the models to be launched in 2014 and 2015, as well as in the ecological focus of the model range.

Brands and business fields

The Volkswagen Passenger Cars brand recorded an operating profit of EUR 440 million (EUR 590 million) in the first quarter of 2014. It should be noted that this figure does not include the Chinese joint ventures. Operating profit was negatively impacted by lower sales volumes, negative exchange rate trends especially in South America and Russia and higher upfront investments in new technologies, while lower material costs and improvements in the mix had a positive effect.

AUDI's operating profit was on a level with the prior-year period, at EUR 1.3 billion (EUR 1.3 billion). Operating profit was impacted by high upfront investments in new products and technologies, as well as in the expansion of the international production network.

ŠKODA generated an operating profit of EUR 185 million (EUR 112 million) in the first quarter of 2014, up 65.2 percent on the previous year on the back of volume and mix-related factors.

SEAT's operating loss improved by EUR 10 million to EUR 36 million (EUR 46 million).

BENTLEY's operating profit climbed by 65.7 percent year-on-year to EUR 45 million in the first quarter (EUR 27 million).

Porsche recorded an operating profit of EUR 698 million (EUR 573 million) in the first three months.

At EUR 136 million, Volkswagen Commercial Vehicles more than doubled its operating profit compared with the first quarter of 2013 (EUR 60 million).

Scania posted an operating profit of EUR 254 million (EUR 227 million). MAN generated an operating profit of EUR 68 million (previous year: operating loss of EUR 102 million).

Volkswagen Financial Services recorded an operating profit of EUR 353 million in the first quarter of 2014, on a level with the previous year. The division signed 1.1 million new financing, leasing and service/insurance contracts worldwide (+ 17 percent).

Winterkorn: "We are pursuing the goal of offering all customers the mobility and innovation they need."

The Volkswagen Group is well positioned to deal with the mixed developments in the automotive markets. The Group's strengths include its unique brand portfolio covering almost all segments, from motorcycles through subcompact cars to heavy trucks and buses, its steadily growing presence in all major world markets and its wide range of financial services.

"We offer an extensive range of environmentally friendly, cutting-edge, high-quality vehicles for all markets and customer groups that is unparalleled in the industry", said Winterkorn. The Volkswagen Group will press ahead with its product initiative across all brands in 2014, and modernize and expand its offering by introducing attractive new vehicles. "We are pursuing the goal of offering all customers the mobility and innovation they need, thus sustainably strengthening our competitive position", Winterkorn added.

The Volkswagen Group is expecting a moderate increase in deliveries to customers in fiscal year 2014. Challenges for the Volkswagen Group will come from the difficult market environment and fierce competition, as well as interest rate and exchange rate volatility and fluctuations in raw materials prices. Volkswagen believes that the modular toolkit system, which is being continuously expanded, will have an increasingly positive effect on the Group's cost structure.

Depending on economic conditions, Volkswagen is expecting 2014 sales revenue for the Group and its business areas to move within a range of 3 percent around the prior-year figure. In terms of the Group's operating profit, Volkswagen is forecasting an operating return on sales of between 5.5 percent and 6.5 percent in 2014 in light of the challenging economic environment, and the same range for the Passenger Cars Business Area. The Group expects the Commercial Vehicles/Power Engineering Business Area to moderately exceed the 2013 figure. Volkswagen anticipates an operating return on sales of between 8.0 percent and 9.0 percent in the Financial Services Division.

The complete interim report is published on our website:

January – March 2014 2013 %

Volume Data

Deliveries to customers ('000 units)

2,442 2,314 + 5.6

Vehicle sales ('000 units)

2,562 2,375 + 7.9

Production ('000 units)

2,565 2,388 + 7.4

Employees (Mar. 31/Dec. 31)

574,900 572,800 + 0.4

Financial Data (IFRSs), EUR million

Sales revenue

47,831 46,565 + 2.7

Operating profit

2,855 2,344 + 21.8

as a percentage of sales revenue

6.0 5.0

Profit before tax

3,357 2,688 + 24.9

Profit after tax

2,468 1,946 + 26.8

Automotive Division

Cash flows from operating activities

2,251 3,528 - 36.2

Cash flows from investing activities attributable to operating activities

2,302 3,942 - 41.6

of which: acquisition of property, plant and equipment

1,625 1,672 - 2.8

as a percentage of sales revenue

3.9 4.1

Net liquidity at Mar. 31

17,714 10,649 + 66.3

Net liquidity at Mar. 31/Dec. 31

17,714 16,869 + 5.0

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    • 1 Second Ago
      • 1 Year Ago
      "North American deliveries fell 4.4 percent to 194,606 units and market share fell to 4.5 percent, compared to 4.8 percent in Q1 of last year" VW ignores the US market requests then expects to sell more there. Maybe they should pause and listen to what people actually want.
        The Friendly Grizzly
        thedriveatfive: The mindset iis that we Americans are too stupid to know what we want. They see themselves as our superiors; they will TELL us what we want.
      Dennis Clouser
      • 1 Year Ago
      So US lags and VW plans to bring back the Phaeton that they'll sell one per month of!!!!??? Meanwhile UP, Scirocco, Polo, Vans are available only in Europe. We may FINALLY get the new GTi/Golf this summer a few years after Europe got them!! Yet VW has to wonder why they're lagging in the US? REALLY? The problem isn't the US Market, It's VW's management. And like my local VW dealer - DON'T try and tell me it takes over a year to convert Mexico over to next gen Golf production, when the Golf was designed as a world car and with US requirements in mind from the beginning!!!!
      • 1 Year Ago
      Let's see... No Passat wagon, no Passat Alltrack, no A4 Avant, no A6 Avant. No wonder they can't sell as many cars here - they don't offer as many. Also shouldn't there be something between the Q5 (too small) and Q7 (too large)?
        • 1 Year Ago
        At nyias apparently the crowds around the jsw awd "concept" were huge, people really liked it. You would think vw would want a chunk of subaru sales but i guess not as they wont sell the 4x4 here. A3 not selling either
        • 1 Year Ago
        yes there is something between the q5 and q7 its called the vw touareg
        • 1 Year Ago
        Wagons and hatchbacks don't sell well in the U.S. When there is a sedan and a hatchback of any certain car, the sedan far outsells the hatch. Just the opposite is true in Europe.
          • 1 Year Ago
          Sh$tty little hatchbacks don't sell well here. Hatchbacks in SUV/CUV/mini-van form sell extremely well. Tell Subaru wagons don't sell well here...
      • 1 Year Ago
      I thought VW's grand plans few years back was to sell North America on less expensive, but still quality & feature rich cars. I think the products they sell in the U.S. are pretty good, particularly the diesels, but I haven't seen a price-drop of any note - at least not since the worst of the financial crisis. I know I'm usually more than a little put-off by their high pricing when comparison shopping. I'd bet that may have something to do with their drop in sales here. Another is their pretty staid VW product line. Same ol' Jetta/Golf/Passat mainly, with some even more overpriced SUVs and a couple oddballs (four-door coupe & convertible, as I recall). I agree with dbc that the Audi side is similarly afflicted. But sticking with VW for a moment; why is their no UP! here? I find that little runabout very interesting. Basic transport in a stylish functional body, sounds pretty good for a country where the fuel economy standards are about to be ratcheted up to 50+ MPGs in about a decade, and with gas is historically expensive now. If Chevy can make a go of the Sonic 'Ghoul-Mobile', then it seems VW is leaving a lot on the table with at least the diesel UP! not being here. And how about that kick-ass mid-size pick-up truck? Can't think of the name now, but since Chevy's bringing in the Colorado (with a diesel no less!), VW won't have the segment as much to itself as it might've. However, with the tin cans the Japanese are still selling here, and Ford doing it's Ford Thing by keeping the Ranger out in favor of whatever small engined gigantor F-150 they can get away with, VW could still do well for itself. I mean pick-ups/ America … small cars/increasing CAFE standards … Maybe it's just me, but I really can't see how it doesn't make sense to at least try and pop those pinadas with products already developed & well-received world-wide. And before the chorus begins, yes yes "Federalization" … It's a regulatory hurdle folks, well understood by all manufacturers. It's not a brick wall.
        • 1 Year Ago
        Instead of writting alot of what you said, I'll say from my point of view your first two paragraphs nail it, and also they need the mid size pick up truck. The problem with that is how much do you think they would sell that truck here for? More than a domestic full size. Ultimately I think alot of their problem is they just aren't competitive in most segments, but especially in SUV where everyone else is making a killing.
      • 1 Year Ago
      Duh! This is what happens when VWAG's management falls asleep when it comes to North America. Every other market gets the latest products while sales wither here in North America as vehicles cease to be competitive. For example, waiting 2 years before introducing the MKVII Golfs, no Polo, no Scirocco, no pickup, and not even thinking of importing sporty SEAT models. No wonder NA VW sales are in the crapper, that is where VWoA wants them!
      • 1 Year Ago
      Porsche and Audi made 2.8 of the 3.4. VW and the other brands are a mess to "only" be making 600 mil.
      Mr Sled
      • 1 Year Ago
      Reliability. Hyundai figured it out. Why can't VW? Boggles my mind.
        • 1 Year Ago
        @Mr Sled
        Since when did Hyundai become the pinnacle of reliability that VW. Should aspire to?
          • 1 Year Ago
          lol agreed
          • 1 Year Ago
          Hyundai has its chaotically long warranty on its vehicles. I believe that it is 10 years and 100,000 miles in most of the US.
        • 1 Year Ago
        @Mr Sled
        Reliability has zero correlation to sales. Ford put touchscreens and turbos in every car and their reliability/quality scores PLUMMETED. But their sales soared. See also Land Rover; dreadful reliability, record sales. VW chose to offer a minimal, dated product lineup in the US, so their sales are low. It's not a surprise to them, they didn't invest in the US lineup, and they are getting what they paid for.
      • 1 Year Ago
      apparently Americans care too much about quality, reliability, appearance, fuel economy, resale value. Crapwagen should just shut it's doors and leave this market.
      • 1 Year Ago
      I owned a Jetta and things started off very well until it hit the 15,000 mile mark. Oxygen sensor light glaring at me to the tune of 200.00 to replace the O sensor, then a few thousand miles later the plastic nipple on the evaporator coil housing cracked and spewed hot antifreeze behind the dashboard and into the passenger compartment floor, the inside passenger door handle stopped working, plastic coat hooks fell off, engine oil leak............I was done with VW and any of their subsidiaries at that point and still have never looked at another VW product again 25 years later-
        • 1 Year Ago
        70k on our 2011 Touareg TDI, not a problem to speak of. Late 80s weren't exactly the golden years of vehicle quality/reliability for any manufacturer. The domestics were also producing utter crapmobiles (I know, we had a Pontiac of that era, and after 3 years it was ready for the scrap yard).
      Winnie Jenkems
      • 1 Year Ago
      VW is not going to get anywhere by selling de-contented cars at lower prices. VW will find no success trying to take on the likes of Toyota and Honda, who have built their reputations on decades of selling boring, reliable economy cars. Not until they have established a solid track record of reliability. Good luck with that. The economy car buyer will pick the Japanese brand (again) every single time, because even if the VW undercuts it on price, eventually every single thing on that VW will break and cost hundreds if not thousands of dollars to fix. Where VW has a chance is the premium but not quite luxury segment - a step below Audi, if you will. For people who want a German car that handles well and has a nice interior, and are willing to pay a premium for it, but can't quite afford an Audi. That's what they should aim for.
      • 1 Year Ago
      If their cars weren't simply bland and boring updates of bland and boring cars, perhaps their sales would improve. The "Stripped-down Jetta" approach was going to attract only a certain number of people.....
      • 1 Year Ago
      Just like any investor, VAG invests where they get the best ROI, that does not appear to be in the U.S. market. Can't blame them.
        • 1 Year Ago
        They don't bring their best cars to the US market. They bring their new cars to the US market late, and with far fewer options. Then they get surprised that they don't sell many. They are reaping what they sow.
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