A good way of measuring the success of the Volkswagen Group’s financial year is via CEO Herbert Diess’s performance-related bonus. In 2021, he took home an extra €5.29 million (£4.4m) to bring his annual total to €8.6m (£7.1m), according to official figures.
Why were Diess and his fellow board members so well rewarded in a troubling year for the automotive industry? Because the German group made profits of €20 billion (£16.6bn) on sales of 8.6 million cars. That’s compared with €19.3bn (£16.1bn) on 11 million in 2019. Put another way, the Group’s €2325 (£1945) profit per car last year was up €571 (£478) on a year when there was no Covid disruption nor a global semiconductor shortage.
As we’ve seen across the industry, however, the chip crisis actually contributed to the bumper profits.
“Vehicle sales across the group declined 6.3%, yet we were able to increase revenues 12% to €250bn (£208bn) as we allocated more chips to higher-margin models and reduced sales incentives,” Diess told financial analysts on an earnings call.
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Higher-margin equals more profits, so production of the relatively budget Volkswagen Golf dropped a whopping 35% while those factories operated by the Group’s premium brands were running at full tilt.
For example, Lamborghini broke out its financial results for the first time to show a 20% profit margin on record sales of 8405 cars. The same went for Bentley, which managed a 14% margin with record sales of 14,594 cars.
Both brands capitalised on demand for their related SUVs, the Lamborghini Urus and Bentley Bentayga, which were by far their best-selling models.
Audi meanwhile posted a healthy €5.5bn (£4.6bn) profit on one million sales – nearly double 2020’s figure, despite a slight drop in sales, led by the Audi Q5 SUV.
Audi said the bumper year was “mainly attributable to a significant improved pricing”, meaning it discounted less and focused on higher-priced models.
Porsche came dramatically close to Audi on profits of €5bn (£4.1bn), despite posting fewer than a third of its sibling brand's sales, at just under 300,000.
This meant Porsche’s revenue per car sold just pushed over €100,000 (£83,442), of which €17,000 (£14,183) was profit.
The Porsche Cayenne was once again the brand’s most produced car, followed by the Porsche Porsche Macan.
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