Audi Group reports 20% sales drop in H1, still gets record-high profit

MANILA: The Audi Group was unable to meet the strong demand for its core brand vehicles in the first half of 2022 due to China's COVID-19-related lockdowns and the ongoing semiconductor crisis. Despite this, the Audi Group saw a 2% growth in revenues to €29.9 billion and a record-high operating profit of €4.9 billion.

In a statement, Audi AG Board of Management Chairman Markus Duesmann said, “Our financial performance in the first six months of 2022 shows just how strong and profitable our brand group is. Despite the challenging economic and geopolitical environment, we were able to increase revenue and returns significantly. At the same time, the current situation in the world makes it clear that economies and society need to move away from fossil fuels even quicker. Expanding renewable energies and switching to e-mobility are important steps in this direction. That’s why we’re on the right track with our strategic focus on e-mobility and carbon-neutral production.”

The group has sold 797,587 vehicle units in the first six months of the year. Audi brand car deliveries decreased by 20% to 785,099 from record-breaking levels in the first half of 2021.

Meanwhile, Ducati sold 33,265 motorcycle units, reflecting a  3.6% drop from last year. Lamborghini reported a 4.9% increase in vehicle deliveries with 5,090 units, while Bentley, the newest brand in the group, sold 7,398 units.

At total of 50,033 Audi all-electric vehicles were delivered, up 52.7% over the previous year. Customers continue to prefer the Audi e-tron, but the Audi Q4 e-tron recorded the biggest sales increase. In light of this, the group's delivery of all-electric vehicle sales grew by 6.3%.

“With the successful rollout of the Audi charging hub, Audi is showcasing a solution for fast and uncomplicated electric vehicle charging in urban areas.The feedback from customers on the launch of the pilot site in Nuremberg is extremely positive, with a hub in Salzburg and other locations to follow in the course of 2022,” Audi AG Board of Management for Sales and Marketing Member Hildegard Wortmann stated.

Beginning in 2023, three new sites in German cities will help meet the rising demand for charging in urban areas. Audi targets to add even more sites in German cities by mid-2024. Additionally, the groundwork for the smart factory for electric vehicles at the Changchun site was set last June, marking another significant development in the electrification strategy. Models based on Premium Platform Electric (PPE) will be produced sustainably and digitally networked for the Chinese market after completion at the end of 2024. More than 150,000 units can be produced annually at the 150-hectare facility.

Operating profit for the Audi Group reached a new high of €4.933 million for the first half of 2022, an increase of 58.5%. Meanwhile, the operating margin increased to 16.5%, significantly higher than the previous year and above the strategic target corridor of 9% to 11%. The operating profit includes positive effects from commodity hedges of €0.4 billion, in addition to the strong operating performance and favorable price position of the Lamborghini, Bentley, and Ducati brands. After experiencing a significant tailwind in the first quarter, the impact has significantly diminished.

“The significant increase in the operating profit and the operating return on sales in the first half of 2022 way above the strategically defined target corridor of 9% to 11% shows that we have mastered the turbulence well and systematically seized the opportunities at the same time,” Audi AG Board of Management for Finance and Legal Affairs Member Jurgen Rittersberger said.

The Audi Group's forecast includes the COVID-19 lockdowns in China in the first half of the year, the ongoing semiconductor issue, and the anticipated short-term effects of the situation in Ukraine. The other effects of the geopolitical crisis and the gas shortage on the global economy is hard to predict with sufficient certainty.

The group expects deliveries of between 1.8 million and 1.9 million units and revenues of between €62 billion and €65 billion for the full year 2022. Forecast for the operating margin range from 9% to 11%.  Audi expects that the capex ratio will be between 4% and 5%. The share of research and development costs is now anticipated to be slightly higher than the 6% to 7% range due to higher upfront expenditure on future technologies.

Photos from Audi Group

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