Volkswagen Group expects its sales revenue growth to slow in 2024.
The automaker said in a Friday (March 1) press release that it expects sales revenue to grow “up to” 5% this year after it grew 15% in 2023.
Positive effects from the market launch of new products will support its growth in 2024, as will a positive trend in product costs and continued cost discipline, Volkswagen said in the earnings release.
At the same time, the automaker faces challenges around the economic situation; intensifying competition; volatile markets for commodities, energy and foreign exchange (FX); and stricter emissions-related requirements, it added.
“We have excellent products and have launched ambitious group-wide efficiency programs,” Arno Antlitz, chief financial officer and chief operating officer at Volkswagen Group, said in the release. “Therefore, we are confident about 2024, despite the muted economic outlook and intense competition.”
The company’s shares dropped as much as 7.2% Friday before reducing those losses, Bloomberg reported Friday. Over the past year, Volkswagen Group stock has dropped 6.7%.
Like the rest of the automotive industry, the automaker is facing greater competition, weakening demand for electric vehicles and a drop-off of the pent-up demand that drove sales after supply chain problems caused by the pandemic, according to the report.
The industry and its customers also continue to be impacted by increases in interest rates and the cost of living, the report said.
Volkwagen in particular has been challenged by macroeconomic problems in its biggest market, China, which is dealing with a property slump and reduced business confidence, per the report.
It was reported in January that carmakers could face a bumpy road in 2024 after enjoying a resurgence in auto sales in 2023.
Car sales fell to their lowest level in more than a decade in 2022 due to supply chain and manufacturing snags, as well as inventory issues, but then recovered with double-digit growth in 2022.
It might be a different story in 2024, as dealerships will need to begin trying to entice buyers once more, rather than relying on pent-up demand, Cole Potamkin, chief operating officer at dealership chain Potamkin, told the Wall Street Journal (WSJ) in a report posted Jan. 3.
“We’re finally getting back to the traditional buyer’s market,” Potamkin said.
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