Volkswagen sees increased competition later this year, with supply chain bottlenecks easing and a booming electric car market in China, the automaker said on Thursday. The automaker added that it favored margins over sales volume as it sought to maintain market share.
After a strong first quarter performance, the company maintained an annualized return on sales outlook of 7.5% to 8.5%. The result for the first three months of the year was driven by higher revenues in Europe and North America.
In China, however, sales fell 14.5% and CFO Arno Antlitz acknowledged the automaker has work to do to catch up with Chinese competitors in the EV market.
“The competition will intensify,” Antlitz said in an interview with reporters after the results.
When asked how the automaker will respond to the wave of EV price cuts, Antlitz said “our focus is on quality rather than volume. This is especially true for EVs… we don’t want to lose the our margin target.”
Volkswagen’s revenue in the first quarter amounted to 76 billion euros. Operating profit fell from $8 billion a year earlier to $5.7 billion but still beat analyst expectations by $5.48 billion, according to Refinitiv data.
Total shipments in the first quarter were up 7.5% year over year versus sales up 6.5%. In March, sales were 23.9% higher than the same month last year.
Source: Terra
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