Investors worry as Volkswagen prioritises growth over profit

But even so, the VW Group is confident it can keep the margins stable and grow volume, despite the fears of the investment community. For one thing, it is sitting on an order bank of almost two million cars as a result of the group struggling to build cars in 2022. “Therefore, it’s very logical for us that we have a strong increase in deliveries in ’23,” Blume argued.

Despite the higher-volume targets and the stiffer competition as factories start ramping up, Blume promised to keep the faith on profit over volume. “It is my position that we drive the company more market-driven than production-driven,” he said.

VW is more bullish about the 2023 global vehicle market bouncing back after a stilted couple of years. Despite IHS Automotive predicting 3% growth from 2022’s total of 69.6 million vehicles, VW believes it can grow its sales by 12%, adding another million. Revenue, it believes, will increase by between 10-15%.

Car markets will grow the world over, VW predicts, despite a “weak” start to China, the company’s biggest market last year with 3.6 million sales. Excluding China, the company had a “decent” start in the first weeks of the year, Antlitz said.

For investors, it was worrying that the VW Group was willing to push for close on 10 million sales. “We consider it a risky bet to run the company based on such expectation because it bears risk of overproduction and overspending,” Patrick Hummel, analyst at UBS bank, wrote in a note to investors. “While 2023 results are likely to be less bad than we initially feared thanks to [order] backlog execution, we still expect a deteriorating pricing and margin trend, and we think VW’s volume brands are not well prepared.”

What VW was signalling, however, was the return to normal competition, and for the group overall conditions more aligned to pre-Covid than post-, albeit with lessons on costs and pricing learnt.