Volkswagen says China is accelerating recovery

China is Volkswagen's biggest market and deliveries increased by 33% in September

China is Volkswagen’s biggest market and deliveries rose 33% in September.

Auto giant Volkswagen on Friday said its recovery in China was accelerating, but it sounded like a cautionary note on geopolitical risks as concerns grow about German dependence. into the Asian giant.

The German group, whose brands include Audi and Skoda, saw net profit in the July-September period slipped due to the shutdown of the company in Russia and the costs associated with the listing of the luxury car brand Porsche.

But there was a 26% increase in deliveries in China, Volkswagen’s largest market, during the same period and a 33% increase in September alone.

The news is a boost for the group, which, like other international companies, has seen its business in China hit by closures and other restrictions as part of its business. of the country’s no-COVID policy.

China remains a “strong market for Volkswagen… We have a strong partnership in China,” said group CEO Oliver Blume, who will be accompanying Prime Minister Olaf Scholz on the trip. visit the world’s number two economy next week, said.

However, German companies are facing growing scrutiny for their reliance on authoritarian China, after companies in Europe’s top economy burned to the ground due to their overreliance on China. gas imports from Russia.

Moscow has cut off vital energy supplies to the continent, in suspicion of retaliation for sanctions imposed during the Ukraine war, which have left consumers and businesses facing hefty bills.

Need to be ‘flexible’

When asked about rising tensions with China, Blume replied that the company was monitoring the “geopolitical situation”.

It is important for Volkswagen, he added, to be “flexible with our global footprint in terms of responsiveness to geopolitical crises”.

Worries about China recently became apparent when the ruling coalition erupted into a dispute over whether to sell a stake in a Hamburg port terminal to a Chinese company.

Scholz ultimately defied calls from six ministries to veto the sale over security concerns, instead allowing the company to repurchase the reduced shares.

In the third quarter, Volkswagen has net profit was 2.13 billion euros ($2.12 billion) in July-September – down more than 26% year-on-year.

Volkswagen said the results were “weighed down by non-recurring costs totaling around €1.6 billion related to the revaluation impact due to the suspension of the group’s Russian operations and related costs.” Porsche IPO”.

Along with other German automakers including rivals Mercedes-Benz and BMW, Volkswagen stopped exporting to Russia shortly after the invasion of Ukraine and closed local production facilities.

Last month, luxury sports car maker Porsche went public on the Frankfurt Stock Exchange in one of Europe’s largest listings in years. Volkswagen is expected to use some of the cash raised on the listing to change direction tram.

The group confirmed its outlook for 2022 in most areas. It expects sales revenue to be 8 to 13% higher from the previous year.

Porsche shares rise at one of Europe’s biggest market launches

© 2022 AFP

Quote: Volkswagen says China’s recovery is accelerating (2022, October 28) taking October 28, 2022 from Volkswagen-china-recovery. html

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