The Volkswagen Group has made good on the various disruptions of the last year, with profits up £478 per car. That’s more than it made pre-covid. However, analysts are doubtful that this good fortune will last:
Volkswagen said the Spanish company's performance had been “appreciably weakened by commodity price increases and the shortage of semiconductors”.The profit boost didn’t just come from higher prices on the more expensive models it prioritised. It also gained measurably from the high price of used cars, notably through those owned by its leasing arm, Volkswagen Financial Services .
Cars it had figured being worth one price when they came back were suddenly commanding much higher prices as the shortages of new cars bumped up the value of used cars. That had VWFS profits more than double in the year to just under6bn , “primarily due to the high demand for used vehicles and considerably lower risk costs for credit risk and residual value risk,” Volkswagen said in its annual report.
However, analysts are lukewarm about the ongoing ability of the Volkswagen Group to maintain this level of profitability. The9bn boost to profits from car sales was “mostly driven by external factors” outside of its control, wrote Philippe Houchois, analyst at investment bank Jefferies, in a note to investors.
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